
While the history of market bubbles begins with tulip speculation in 1630, scientists are just now beginning to understand what makes our psychology vulnerable to the boom and bust of market cycles.
"Read Montague, a neuroscientist now at Virginia Tech, argues that the urge to speculate is rooted in our mental software. In particular, bubbles seem to depend on a unique human talent called 'fictive learning,' which is the ability to learn from hypothetical scenarios and counterfactual questions."
Read it at The Frontal Cortex.