Reply To: QUESTION: FEAR as a sort of multiplier

#21492

I don’t mean to beat a dead horse, but just one more question….please feel free to ignore me.

My title focuses on FEAR, but I guess I wonder how the more general affects of emotion
are modeled in economic principles. Say in terms of a demand curve. (or even a supply curve when considering the emotion of the maker)

I imagine that there is a particular product demand curve equation that emotion might push it in or out along the qty (x) axis depending upon how that emotion affects that person’s “feelings” about perhaps future availability or affordability of a good or perhaps just of another more valued good. I believe the “wealth affect” and any of the “calming” words used to make unexpected events seem “OK” are a play against emotions causing market uncertainly……but then, what you say about uncertainly causing some to get conservative, while others just start getting interested and step up to the challenge. (and the range of reaction is indeed wide)

So the direct question is, how is individual or crowd emotion modeled / considered?

Thanks for your patience with me…….I find the mentality of the mob, and work done to control and/or use and direct it to be fascinating.

-Quentin (and I am sorry and admit to horse abuse)