potential. Policy implications go well beyond improving regulation and transparency. -- Financial bubbles ; financial crises … excitement of potential gain is disconnected from the anxiety of potential consequences; producing groupthink and bubbles. When … ; group functioning ; groupthink ; market instability ; financial regulation ; psychoanalysis ; psychology …

. -- Financial bubbles ; financial crises ; group functioning ; groupthink ; market instability ; financial regulation … excitement of potential gain is disconnected from anxiety about potential consequences, producing groupthink and bubbles. When … from excitement that creates bubble potential. Policy implications go well beyond improving regulation and transparency …

We develop a model of rational bubbles based on the assumptions of unknown market liquidity and limited liability of … condition for whether rational bubbles are possible. Based on this analysis, we discuss several widely-discussed policy measures … with respect to their effectiveness in preventing bubbles. A reduction of manager bonuses or a Tobin tax can create or …

Chapter Summary: We consider the recent financial crisis as an overlapping sequence of interdependent financial bubbles …-prediction should be a mainstay of financial regulation …