I watched the 10 O’clock News on Monday evening with a sense of profound dismay, as the BBC reported on the escalating spate of alleged gas attacks on girls’ schools in Iran. The idea that an organised campaign of potentially State-sanctioned revenge-by-poisoning was being orchestrated against children who had committed the ‘crime’ of public protest was truly abhorrent. But what if none of it was true?

The evidence seems to be compelling. What began with an isolated case in the city of Qom on the 30th November, when 18 schoolgirls fell ill (Source: BBC News), has escalated to the point where students in at least 26 schools across the country were affected on Wednesday last week alone.

The victims have described a “tangerine or rotten fish smell”, before reporting symptoms including nausea, dizziness and fatigue.

Iran’s Supreme Leader Ayatollah Ali Khamenei has now gone public, describing the incidents as an “unforgivable crime”. He has gone on to say “If there are any people involved in the matter, and there certainly are…the perpetrators must be given the most severe of punishments”. (Source: BBC News)

Coincidentally I found myself listening to the Sideways podcast on Tuesday morning. Episode 32 is called The Social Contagion and in it presenter Matthew Syed “examines the strange spread of illness in a school in Yorkshire” to explore what is now known as mass sociogenic illness. It used to be called mass hysteria.

At Outwood Academy in Ripon in 2015 a child fainted, triggering a domino effect which was apparently exacerbated by reports of a gas leak and/or a poisonous chemical in the water. But despite a thorough investigation the Fire Service found no evidence of any such physical catalyst.

Similarly, dozens of schools in Northern Afghanistan reported alleged chemical attacks between 2004 and 2012. In each case no evidence was found by the investigating authorities, and a subsequent report by the WHO of 22 of the incidents backed up the initial conclusions.

In every case of MSI the root cause is escalating anxiety, often across a close social group, where there may already be a broader context to accentuate people’s fears and concerns. This then snowballs as a result of what Daniel Kahneman calls an “availability cascade”, which he describes as “a self-sustaining chain of events, which may start from media reports of a relatively minor event and lead up to public panic…”

The physical manifestation of this can be both shocking and self-perpetuating, and in all cases the symptoms are real, but the cause is misdiagnosed.

I think exactly the same effect can be seen in stockmarket crashes and bubbles. Think for a moment about the very term ‘FOMO’: fear drives people to behave irrationally as share prices rise or fall dramatically, and social contagion takes hold.

Being aware of the powerful effect of MSI may therefore serve investors well when they need to fight against the temptation to let emotions and anxiety determine their behaviour when it comes to investing.

Finally, none of the above is intended to prejudge the grim events unfolding in Iran: they could be every bit as real as many are reporting them to be.