contagion effects


The adverse consequences of one firm's actions that can spread throughout the industry in which it operates. A hypothetical contagion effect might be if a pharmaceutical company produces a new drug and skipped an optional testing procedure in the process, an unintended abundance of side effects on consumers might cause the regulatory agency to require this costly test for all pharmaceutical companies in the future.

Use contagion effects in a sentence

The contagion effects that Chase's deplorable actions in regard to unqualified homeowners were far-reaching and no banking sector was immune.

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The deceit of Enron caused large contagion effects across the energy sector in which consumer trust in the sector was reduced and stock prices dropped.

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Only a handful of investment banks had bad assets on their books, but what wasn't anticipated was the contagion effects to rest of the industry when the money markets seized up.

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