Intro to Economic Bubbles

Don't Burst My Bubble

The Science, Psychology, and Math behind: Bank Runs, FoMo, and Rapid Expansion

Open Ended

Tell me the funniest joke you can think of at the moment

We'll auction it off now, but know the rules:

1. You can stop bidding any time.

2. Once you're out, you're out.

3. Top two bidders pay their final bid.

4. Only ONE person can win the $20.

​

Who Wants $20?

Open Ended

What might the Dollar Auction have taught us?

Open Ended

How does this game demonstrate the two cognitive biases: loss aversion and the sunk cost fallacy?

Open Ended

Have you ever been faced with a decision where your best option was to quit, but you kept going anyway?

Will You Let It Roll?

Google Docs: Sign-in

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Your Starting Balance: $100

Out-Add +1 in the appropriate Column

​In:

1. I'll roll a single die:

   1. 1-2 Market Down (bear)

   2. 3-6 Market Up (bull)

Each Round:

Are you in or out?

2. I'll roll 3 die.

   1. I'll add the 3 together

   2. If the market goes up, you add that number

   3. If the Market Went down, you subtract that number

Each Round:

Are you in or out?

Calculate Your New Total

$100 + 1 or

$100 +/- Market

Each Round:

Are you in or out?

Round 1

Round 2

Round 3

Round 4

Round 5

Open Ended

What is your current balance?

Round 6

Round 7-2x Bonus

Round 8

Round 9

Poll

Should Round 10 Be a Bonus Round? (x2)

• Yes

• No

Round 10

Open Ended

What is your total?

Complete the bottom 3 Questions on the Doc

Now...It's time for Bubbles!

Multiple Choice

What pushed up Tulip prices?

• The Demand

• The Government

• Random Market Movements

• Nobody Knows

Multiple Choice

The year 2000 saw stock of Internet companies soar and then plummet; this is referred to as the _____.

• Millennium Growth

• Housing Bubble

• Dot Com Bubble

• Tulip Mania

Multiple Choice

Stocks of companies go up in value or down in value based on _____.

• Time Passing By

• What the CEO Decides

• The stock exchange

• The demand and supply of investors

Multiple Choice

The Tulip mania bubble burst when _____.

• People collectively realized they had no intrinsic worth

• Another flower took its place

• The government stopped tulips from being traded

• The flowers were no longer available

Open Ended

You have learned from this lesson what a "mania" is. Another small part of the entire business cycle can be a "depression" (Hint: the opposite of mania). Compare and contrast a mania and a depression.

Open Ended

Gold, iPads, cell phones, and computers are all items that frequently go up and down in value. What do you think are the two main reasons this frequent change may occur?

Open Ended

How does an economic bubble burst?

Game of Theories

​https://mru.org/courses/principles-economics-macroeconomics/business-cycles-austrian-economic-theory