HE WAS ALWAYS WAY AHEAD OF EVERYONE ELSE: Adam Smith on the Negativity Effect. Long before psychologists and economists documented the negativity effect — “Bad is stronger than good,” as Roy Baumeister and I summarized it in The Power of Bad — Adam Smith recognized its many manifestations (like loss aversion — we fear losses more than we appreciate gains) and offered lucid explanations, as Yahya Alshamy and Daniel Klein explain in a new paper.