Examining Individuals Irrational Behavior in Economic Bubbles

Donglai Wang (), Ke Hu () and Hengyuan Liu ()
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Donglai Wang: Rochester University
Ke Hu: Rochester University
Hengyuan Liu: Guangzhou College of Technology and Business

A chapter in Proceedings of the 2022 2nd International Conference on Economic Development and Business Culture (ICEDBC 2022), 2022, pp 1195-1198 from Springer

Abstract: Abstract Although it has long been agreed that traditional economic theory assumes rational behavior, at one time there was considerable disagreement over the meaning of the word “rational”. To many, the word suggested an outdated psychology, lightening-fast calculation, hedonistic motivation, and other presumably unrealistic behavior. No matter who we are and what social class, understanding how we are predictably irrational can provide a starting point for improving our decision making economically. In this study, we as human nature would behave predictably irrational in the situations due to the influences of outside environments and inside of our human emotions such as three economic bubbles that this paper studies are the Dot-Com bubbles, Japanese housing bubbles, and United State housing bubbles. This study shows that individuals should improve their own independent thinking in making their decisions through understanding the idea for making our own decisions that they are neither random nor senseless.

Keywords: Irrational behavior; Economic bubble; Human choice; Behavior economics (search for similar items in EconPapers)
Date: 2022
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DOI: 10.2991/978-94-6463-036-7_176

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