What is a stock market bubble?

Question 1: Bubbles and Bursting Bubbles

1. What is a stock market bubble?

2. Do stock market bubbles really exist?

3. If stock market bubbles really do exist, why?

I’ll add two more questions:

4. How do we know when we’re a stock market bubble?

5. How do we know that we were in a stock market bubble?

Question 2: Monty Hall

I have 100% convinced myself that Monty Hall’s game contestant should switch doors.

Any takers of an attempt to convince me otherwise?

Question 3: Modeling Irrationality

Which is harder: modeling rational behavior or modeling irrational behavior?

Question 4: Insane Investors, Rational Markets?

Okay. So what’s the verdict here? Do we have both rational investors and rational markets as we so often assume to build our economic models? Might one be rational and the other be nuts? Are both nuts? Or do we observe some mixing?