Question

________ and ________ may provide an explanation for stock market bubbles.

Answer 1

Answer:

The correct answer to the following question is Option C (Overconfidence; Social contagion).

Explanation:

Overconfidence:

This is one of the growing and perhaps most omnipresent of the several prejudices which are susceptible to subjectivity and human judgment. Although we were sufficiently rational about cognitive shortcomings, we would have been better capable of defending oneself from either the mistakes that keep us vulnerable to human behavior.

Social contagion:

Social networking has revolutionized the way information is produced and consumed. Except for conventional media broadcasting which has been absorbed unconsciously, social networking relies on participants to actively spread the data they collect to certain social connections, can be named as Social contagion.

So, this both will helps to give an explanation for bubbles of the stock market.