The familiar pattern of bubbles and crashes in markets for financial assets can be caused by a number of factors including (1) chasing speculative gains and (2) lack of common knowledge of the rationality of traders. Briefly explain what is meant by these two concepts.

Question

Quizplus · Accepted Answer

The Answer of The familiar pattern of bubbles and crashes in markets for financial assets can be caused by a number of factors including (1) chasing speculative gains and (2) lack of common knowledge of the rationality of traders. Briefly explain what is meant by these two concepts.

The Familiar Pattern of Bubbles and Crashes in Markets for Financial