Asset price "bubbles" occur when buyers expect asset prices to increase in the future.

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Asset price bubbles are characterized by a rapid increase in the prices of assets (e.g. stocks, real estate, etc.) that are not supported by underlying economic fundamentals. This happens when investors expect prices to increase even further in the future, leading to a self-fulfilling prophecy that drives prices up beyond what they are actually worth. Eventually, the bubble burst as investors start realizing that prices are not sustainable, leading to a sharp decline in prices and significant financial losses.

Asset Price "Bubbles" Occur When Buyers Expect Asset Prices to Increase