Editing Time preference (section)

=== Sign and magnitude effects ===
Work by Richard Thaler found the first two main effects.<ref>{{Cite journal |last=Thaler |first=Richard |date=1981-01-01 |title=Some empirical evidence on dynamic inconsistency |url=https://www.sciencedirect.com/science/article/abs/pii/0165176581900677 |journal=Economics Letters |volume=8 |issue=3 |pages=201–207 |doi=10.1016/0165-1765(81)90067-7 |issn=0165-1765|url-access=subscription }}</ref> To measure gains and losses, he asked about the same numerical earnings or debts framed as winnings from a bank lottery or a traffic ticket. He found that gains are discounted more than losses, meaning that, they valued earning money sooner than delaying debts. He also found the discount rate to be higher when asking about tradeoffs between large amounts of money versus small amounts of money, even though the rate of substitution was the same.

Some current work explains the psychological underpinnings of these findings. One suggestion is the idea of contemplation emotion, or the feeling of waiting for an event to occur. The idea is that one wants a positive event to occur and does not want to wait for it; on the other hand, people may not mind to delay a negative outcome such as a monetary loss.<ref>{{Cite journal |last1=Molouki |first1=Sarah |last2=Hardisty |first2=David J. |last3=Caruso |first3=Eugene M. |date=December 2019 |title=The Sign Effect in Past and Future Discounting |url=https://journals.sagepub.com/doi/10.1177/0956797619876982 |journal=Psychological Science |language=en |volume=30 |issue=12 |pages=1674–1695 |doi=10.1177/0956797619876982 |pmid=31674883 |issn=0956-7976|url-access=subscription }}</ref> This can help explain the sign effect.