Scientific Definition
Prices driven far above intrinsic value by feedback loops of belief and behavior.
Plain-English Definition
Prices driven far above intrinsic value by feedback loops of belief and behavior.
Feynman Explanation
Bubbles are obvious — in retrospect.
Core Principle
Prices driven far above intrinsic value by feedback loops of belief and behavior.
Mechanisms
Pending editorial review.
Prices driven far above intrinsic value by feedback loops of belief and behavior.
Pending editorial review.
Pending editorial review.
Pending editorial review.
Pending editorial review.
Strategic decisions made at the top of bubbles age very badly.
Inputs (Triggers)
Pending editorial review.
Outputs (Behaviors)
Pending editorial review.
Behavioral Signature
Bubbles are obvious — in retrospect.
Examples
- Dot-com, housing, crypto cycles. Pattern repeats.
- Strategic decisions made at the top of bubbles age very badly.
Pending editorial review.
Famous Experiments
Pending editorial review.
Design Principles
- Track price-to-fundamentals and the share of buyers buying because price is rising.
Measurement Approaches
Pending editorial review.
Evidence
Pending editorial review.
Pending editorial review.
The Perverse Incentive Lens™
How this behavior is exploited — and how to redesign around it.
- Track price-to-fundamentals and the share of buyers buying because price is rising.
Pending editorial review.
Pending editorial review.
Interactive Mini Network
Click any neighbor to re-center the graph and follow the threads of connection.
Knowledge Graph Neighbors
Auto-linked to the rest of the Human Behavior Taxonomy by family, domain, dimension, and shared keywords.
The rate at which customers (or employees) leave over a period.
The gap between early adopters and the early majority kills most products.
Innovators → early adopters → early majority → late majority → laggards.
Low-end or new-market entrants overtake established incumbents.
Asset prices fully reflect available information; you can't reliably beat the market.
Doing everything right by current customers can kill you.
Customers hire products to do a job in their life.
Aggregating many niche markets equals or exceeds the mainstream.
Beliefs about reality shape the reality.
Technologies grow slowly, then explode, then plateau.
Algorithms show us content that reinforces our existing views.
How will I feel about this in 10 minutes / 10 months / 10 years?