MRIs of Careful People Can Predict When Bubbles Will Pop
In the 1630s, Holland was gripped by the world’s only known case of “tulip mania.” The intensely colored flowers were already a luxury item before then, but their prices leaped when tulips with flame patterned petals hit the market, and they continued rocketing to previously incomprehensible levels. The price for a single bulb soon far surpassed what a skilled worker could make in an entire year, and others commanded enough money to buy homes or land.
It didn’t last, of course. The inevitable and dramatic crash in, or even fallout from the bubonic plague. In this more staid view, people were logically trading based on information the market presented to them. Emotions, or other vexations of human psychology, had no role in it.
