Stock market bubbles: Our evolutionary roots explain why investors follow the herd

Image credit: © Michaeljayberlin | Dreamstime.com. Article by Stephen Johnson. Big Think – July 20, 2021.

The same parts of the brain that help us navigate complex social interactions can also drive us to make wildly bad investments.

• Stock market bubbles, or asset bubbles, refer to a situation where stocks are valued far above what they’re fundamentally worth.
• Unique factors contribute to each stock market bubble, but all play out in a generally similar series of stages.
• Research on the human social brain network offers insight into why investors participate in asset bubbles. […]

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