The Joe Walker Podcast Rational Minds Part 3: Rethinking Bubbles - Vernon Smith
4 snips
Dec 19, 2020 AI Snips
Chapters
Transcript
Episode notes
Bubbles Can Be Rationally Emergent
- Bubbles can form from individually rational behaviour interacting, not just from mass irrationality.
- Collective responses to complexity make bubbles an emergent, often inevitable, outcome.
Learn Market Skills By Doing
- Learn market 'know-how' by experience and imitation, not just instruction.
- Apprenticing with experienced traders builds tacit skills that theory alone cannot teach.
Lab Markets Produced Bubbles Unexpectedly
- Vernon Smith recounts lab asset-trading experiments that produced clear bubbles despite known fundamental values.
- Inexperienced subjects created rising prices that peaked before crashing, surprising the researchers.