How Emotional Contagion Exacts A Behavioral Economic Price

Emotional contagion may actually infect more people than coronavirus.

The danger is that it leads to sub-optimal decision-making which can influence crucial resource allocation and public policies. Smart leaders and well-run organizations recognize that judicious curation of information from experts leads to the best outcomes. JL


Knowledge@Wharton interviews Professor Sigal Barsade:

Emotional contagion is the transfer of moods and feelings from one person to another. At the macro-level, emotional contagion can interfere with making sound, logical decisions. Fear and anxiety cause us to become rigid in our decision-making. "We’re not creative. We’re not as analytical, so we make worse decisions. “Emotional contagion can affect leaders (and) policymakers." Individuals (should) limit the amount of feedback they let in, especially from non-expert sources. That advice is critical when the news is short on facts and long on conjecture. “There’s not a whole lot to say about [coronavirus] at this point, so most of what’s said involves fears or stories, which are mainly negative.”

The fear of catching the novel coronavirus has sparked a shopping frenzy that one New York City newsradio station aptly described as “Purell panic.” Nationwide, stores from Target to Costco to Kroger have seen shelves stripped bare of hand sanitizer, cleaning supplies, rubber gloves, toilet paper and anything else that shoppers think will help them prepare for possible quarantines against the virus, which has spread across 97 countries and killed at least 4,000 people.

In the United States, the number of cases has risen to 647 with 25 deaths as of March 10, according to the CDC. Trading was briefly halted on Wall Street Monday after stocks plunged 7% within minutes of the opening bell amid reports of an oil-price war linked to the outbreak and the looming threat of lockdowns. It was the first halt since the depths of financial crisis in 2008.

To be sure, there is plenty to worry about with the COVID-19 virus, which at present has no vaccine and is easily transmitted through respiratory droplets. But experts contend that shouldn’t warrant an unprecedented run on supplies. Adobe Analytics reported online sales of hand sanitizers, gloves and face masks jumped 817% from January to February. The hoarding even prompted U.S. Surgeon General Jerome Adams to angrily tweet a public warning last week: “Seriously people — STOP BUYING MASKS!”

Wharton management professor Sigal Barsade believes the widespread panic is a form of emotional contagion. Simply defined, emotional contagion is the transfer of moods and feelings from one person to another. It happens all the time on a micro-level and is usually harmless, like a baby smiling back at a smiling adult, or a yawn that ripples from one person in the room to another. But at the macro-level, emotional contagion can be dangerous because it can interfere with making sound, logical decisions.

“I would argue that emotional contagion, unless we get a hold on it, is going to greatly amplify the damage caused by COVID-19,” she said during a segment on the Wharton Business Daily show on Sirius XM. Even though the vast majority of people won’t contract the virus, a much higher percentage will experience emotional contagion, she said. That can lead to a surge in worry, anxiety and fear – unpleasant emotions for individuals that can compound in the broader context.

“One of the things we also know from the research literature is that negative emotions, particularly fear and anxiety, cause us to become very rigid in our decision-making. We’re not creative. We’re not as analytical, so we actually make worse decisions,” she said. “Emotional contagion affects everyone, which means that it can also affect leaders. It can affect policymakers. They have a little bit more protection because at least the policymakers and experts really have good knowledge of the facts. But if you’re not aware that emotional contagion is influencing you, you could make poorer decisions.”

Emotional behavior within organizations is a research focus for Barsade, who has written numerous papers on the topic. One of those papers, “Emotional Contagion in Organizational Life,”  published in 2018, created a foundational model to better understand emotional contagion, although she and her co-authors advocate for much more research in this area.

According to the paper, one of the most intriguing aspects of emotional contagion is the lack of awareness about it. People don’t realize the social influence they are under or how it may affect them because the spread is often based on physiological and automatic responses (like the baby mimicking a smile). Perhaps not surprisingly, this “affect spiral” can lead to greater cooperation and less conflict within groups when the emotions are positive rather than negative. And people don’t even have to be in physical contact with each other to spread their feelings; nascent research shows that emotions easily transmit across social media platforms.

“In the absence of face-to-face communication, individuals are still able to sense or infer cues about emotions based on textual and behavioral indicators, which leads to diffusion of the emotion,” according to the paper. That effect can be amplified by disinformation and what scholars describe as “echo chambers,” where individuals only expose themselves to online information that they agree with and disregard other points of view.

If the research seems to point to an inescapable black hole of negativity, take heart. “The good news is that you can be inoculated, to a certain degree, against emotional contagion,” Barsade said. She outlined three steps to help prevent the spread of unchecked emotions:

1. Be Aware

An understanding that emotional contagion exists is the first step in managing it. Awareness makes the process less automatic, which helps in resisting it. Barsade recommends putting feelings on pause for some self-examination.

“If you’re feeling incredibly anxious or fearful, ask yourself: Do you really have a reason to feel this way? Or is it your friends, or your social media feeds, or news from non-expert sources that is leading you to feel that way?” she said.

2. Reduce Feedback

The big news of the day — whether it’s the coronavirus or the economy — is a natural topic of conversation for friends, family, co-workers and strangers alike. But Barsade suggests that individuals limit the amount of feedback they let into their lives, especially from non-expert sources. That advice is critical when the news is short on facts and long on conjecture.

“There’s not a whole lot to say about [coronavirus] at this point, so most of what’s said about it involves fears or stories that are interesting, which are mainly negative,” she said. “I’ve been hearing from people all over the country where their co-workers are talking about, ‘Well, we shouldn’t let anybody in who comes from a state that has had the coronavirus.’ Or complaining that they can’t buy Clorox wipes. Or how they woke up in the middle of the night and had a little bit of a sore throat, and took their [temperature] immediately because they were afraid of it. What that does is, again, just feed into the emotional contagion.”

3. Don’t Ignore the Problem, but Be Purposeful

Barsade emphasized that limiting feedback doesn’t mean that “you should put your head in the sand” and ignore what is happening. On the contrary, she advises people to stay alert and purposeful in both their words and actions.

“But be judicious about the conversation that you’re taking in,” she said. “Try to turn to health care and health policy experts and behavioral science experts, and even go to multiple experts. Look at the CDC (Centers for Disease Control and Prevention), and the World Health Organization and the NIH (National Institutes of Health). That actually can also help with contagion, because you’re feeding in other affective information and cognitive information that’s going to help you.”

When it comes to action, Barsade said, take the necessary precautions, don’t do more than is needed — and don’t panic.

“The thing that is dangerous about emotional contagion in a COVID-19 situation, or any public health or other situation, is that it can lead to really problematic second-order effects both personally, in the form of fear and anxiety, but also societally,” she said. “For example, the surgeon general is entreating people to not hoard masks that they really don’t need, but health care workers do need.” The Great Recession provides another example, where people whose finances were not directly affected still became anxious and took unnecessary steps.

Still, Barsade acknowledged that feelings are real and powerful, particularly during national events. Studies have found that Manhattan residents have lingering psychological effects from Sept. 11, for example.

“I should make it clear: You really feel this way. It’s not cognitive, and you really feel this way,” she said. “Of course, it does get even more intense when it becomes closer to you. And the reason for that is because you hear more and more, and you do have more of a legitimate fear that something might affect you.”