Irrational exuberance, football fans and the Mona Lisa!
What do footballers and football fans have in common with the Mona Lisa? Well I wouldn’t be asking the question if the answer wasn’t “something”, would I now?
In his book Irrational Exuberance, the Yale economist Robert Shiller explains how the inherent psychological characteristics of human beings and their application to social situations and, well, life, cause irrational stock market and housing market bubbles, with a bubble being where an asset (such as a share in a company or a house) is valued at an amount that is greater than what it is actually worth (think of the famous Tulip-mania in 17th century Holland, those silly Dutch buggers).