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" "Positive feedbacks, when unchecked, can produce runaways until the deviation from equilibrium is so large that other effects can be abruptly triggered and lead to ruptures and crashes.
Didier Sornette (born 25 June 1957) is Professor on the Chair of Entrepreneurial Risks at Swiss Federal Institute of Technology Zurich (ETH Zurich). He is also a professor of the Swiss Finance Institute, a professor associated with both the department of Physics and the department of Earth Sciences at ETH Zurich.
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It is difficult to assess how much this gambling spirit is active in the minds of individual investors. If it is, even to a small degree, it is relevant to our discussion since it makes investors prone to imitation and herding because they invest on little information. It may also explain the anomalously large volatility of prices and their potential instabilities.