Is there Really a Tech Bubble?

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Daniel Ayele:

For example, if you were to take five people and individually ask them their opinion of the future of a sector they would likely give you their honest opinions (and their predictions would probably be quite reasonable). However, if you place them in a room together and ask the group for their expectations of the future of a sector, if a bubble were occurring you’d see that the average prediction for the group together was actually higher than the average of each individual’s opinion.

In most bubbles, this type of behavior tends to manifest itself as a fear of being left out or left behind. This feeling, when our expectations of the future become overly dependent upon each other’s perceptions of the future and result in a collective view that is more optimistic than each of our independent views, is arguably what leads to bubble-like behavior. I believe that this can be used as a pretty good indicator for judging if a bubble exists. (Source)


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Posted: March 19th, 2011
at 6:49pm by mnp

Categories: web,business,development

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