Abstract
In this chapter we weave theoretical threads together and present a working typology of bubbles. Specifically, we delve into the interplay of hype and hope to understand what exactly triggers the formation of an asset bubble. We view hype and hope as the two critical states that influence the perceived future value of the asset, and often accelerate the asset valuation processes rather uncontrollably to create an asset bubble. The key emphasis in this chapter is on hype processes, four types of hype-related states— delusional optimism, overoptimism, pessimism, and realism talk—and sentiment-guiding theories. The central thesis of this chapter is that a sentiment about an asset often remains temporally invariant and sticky because a majority in the stakeholder network is willing to change the sentimentguiding theory rather than the sentiment itself—and this helps in coping with the perceived uncertainty.
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Notes
Applebaum and Hilzenrath (2008).
Clark and McGrath (2009).
Biddle (2013); Vardi (2013).
Turcan (2011).
Dholakia and Turcan (2013).
Rutherford et al. (2009).
Turcan (2006).
Ibid.
Ormerod (1998).
Strategy management advisor in Turcan (2006).
Kahneman (2011); Keynes (1936).
Ibid.
Turcan (2006).
Ibid.
Ibid.
Byun (2010).
Christie (2013).
Chadha (2013); Rapoza (2013); Riley and Pang (2013); Veneziani and Weisenthal (2010).
Turcan (2006).
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© 2014 Nikhilesh Dholakia and Romeo V. Turcan
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Dholakia, N., Turcan, R.V. (2014). Hype, Hope, and Bubbles. In: Toward a Metatheory of Economic Bubbles: Socio-Political and Cultural Perspectives. Palgrave Pivot, New York. https://doi.org/10.1057/9781137361790_4
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DOI: https://doi.org/10.1057/9781137361790_4
Publisher Name: Palgrave Pivot, New York
Print ISBN: 978-1-349-47477-6
Online ISBN: 978-1-137-36179-0
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