This paper examines experimentally two common conjectures in the popular literature on financial markets: that they are swayed by emotion and that they behave like a 'crowd'. We find consistent evidence that deviations of prices from fundamental value depend on the emotion of excitement and on...

This paper evaluates the rationality of anger in the light of a standard notion of economic rationality. Whether anger is rational or otherwise cannot be answered in general, but will depend on the economic setting. As long as anger can be explained as a preference in a parsimonious and stable...