Economic bubbles occur when prices trending sharply upward serve as a positive, rather than a negative, feedback mechanism. For whatever reason buyers believe that the the value of the asset will continue to rise well beyond the current price, if the price rises, exuberant speculators buy more, or those who missed out on the lower price want to buy before the price isles any higher.Someveconomists offer the greater fool theory to explain this:Buyers justify the high price they pay by assuring themselves that they will find " a greater fool " who will pay even more, Or buyers assume that a rising trend has a momentum that will surely carry it higgher.Uder the right conditions, prices can reach dizzying heights before falling.One famouse example of this phenomenon is the tulip-buying bubble centered in Amsterdam in the 1630s when a single tulip bulb could cost a year's salary