Addressing the Psychology of Financial Markets

Article

Professor Tuckett suggests the key to understanding financial markets is the co-evolution of human nature and financial institutions. He explains the role of stories centred on 'phantastic objects' and groupthink in helping to create asset price bubbles. He concludes that measures to prevent bubbles in the future will be ineffective if they do not include a collective re-examination of the ways savings are managed and a deeper understanding of the emotional nature of the situation financial markets make us all confront.

Professor Tuckett suggests the key to understanding financial markets is the co-evolution of human nature and financial institutions. He explains the role of stories centred on 'phantastic objects' and groupthink in helping to create asset price bubbles. He concludes that measures to prevent bubbles in the future will be ineffective if they do not include a collective re-examination of the ways savings are managed and a deeper understanding of the emotional nature of the situation financial markets make us all confront.

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