This curious speculation in tulip bulbs near four centuries ago has become a modern synonym for and warning about the irrational speculation that may break out in any asset market. Nevertheless, a look at the forces that actually drove it provides an alternative, fundamental explanation and a warning to observers of asset markets not to accept so quickly unprovable psychological explanations of asset prices.
KeywordsAsset pricing Bubbles East India Company Forward contracts Multiple equilibria Mississippi Bubble South Sea Bubble Speculative bubbles Tulipmania
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