How Should Governments Respond to Emotion-Driven Policy Bubbles?

In this paper, I elaborate on three strategies that governments can implement when faced with emotion-driven policy bubbles: the wait-and-see approach, the emotional containment approach, and the bubble-pricking approach. Based on the limited but important literature on this phenomenon and on studies addressing universal psychological processes, I offer some thoughts on the conditions under which each of these policy prescriptions may be the appropriate path to follow. I conclude that the case for a wait-and-see approach is strong, among other instances, when bubbles cannot be detected with a reasonable level of confidence while they are still in the initial overinvestment phase; the case for emotional containment is strong when policymakers are interested in preventing such a bubble from getting out of hand; and the case for the bubble-pricking approach is strong when (i) the growth of an emotion-driven policy bubble causes significant harm, and (ii) governments do not have at their disposal the necessary tools to keep the harmful effects of the policy bubble and its slow burst at a manageable level. Policymakers should also tailor their response to the particular characteristics of the policy bubble at hand and to the affective processes sustaining it.