The Good News-Bad News Effect: Asymmetric Processing of Objective Information about Yourself

This paper examines how individuals ’ beliefs respond to objective information about their ranking on a neutral quality – a meaningless number on a card – or on a qual-ity that has a significant self-image component – intelligence or beauty. For favorable news in the image tasks, subjects respected signal strength and update as “optimistic Bayesians, ” but they heavily discounted and largely ignored signal strength in pro-cessing unfavorable news, leading to noisy posterior beliefs nearly uncorrelated with Bayesian inference. None of these patterns were observed in the control. Subjects did not display confirmatory bias, but the results can explain its root cause – disconfirm-ing signals are treated as “bad news ” due to the self-esteem loss of realizing one was initially wrong