A teenage girl in Pune was the first casualty of swine flu in India. Her death can also be the tipping point at which vague concern becomes full-blown panic. There are already reports of a rush at Pune’s public hospitals that conduct swine flu tests.
Hard though it is to believe, there are striking similarities between such episodes of panic and the panic buying that grips investors during a stock market bubble. And thus the lessons of the latter could be used to manage the former.
Both are cases of what are known as information cascades, a process in which people look at what others are doing and then unthinkingly choose the same path: Thus irrational behaviour seems to be rational behaviour.
Behavioural economists say that information cascades are fragile and can be reversed with new types of credible information. At times, even one unit of fresh information can do the trick.
Public health agencies, citizen groups and the media can play a calming role, to ensure that hospitals are not overwhelmed by panic-stricken citizens.