Bubbles and Crashes

What an engaging book! Why do booms and busts happen during the deployment of some technologies and not others? The work looks deeply at many memorable episodes of new technologies - electric lighting, vulcanized rubber, insulin, telephony, radio and television, electronic commerce, and much more. The authors bring accessible and penetrating insight to the economics, and illustrate with rich examples. It is a joy to read the stories and analysis. Highly recommended! -- Shane Greenstein, Martin Marshall Professor of Business Administration Strongly grounding their work in historical evidence, Goldfarb and Kirsch advance our understanding of how technological innovations sometimes do, and sometimes don't, lead to financial bubbles. They move the discussion of bubbles and crashes away from journalism and toward science. Investors and finance professionals along with financial regulators and policy makers need to absorb the lessons of this provocative analysis. -- Richard Sylla Goldfarb and Kirsch provide an interesting take on some factors that facilitate the development and bursting of bubbles in technology industries...Readers may particularly appreciate the discussion on competition and policy...Practitioners, graduate students, and researchers may benefit by reading this book. Highly recommended. --S. R. Sisodiya, CHOICE A fascinating account of how and when new technologies lead to exuberant asset prices. Anyone who thinks about innovation and financial markets will enjoy this book. -- Jonathan Levin When is a technology boom actually a bubble? In Bubbles and Crashes authors Goldfarb and Kirsch deliver a nuanced guide to answering this question. Based on the careful examination of 88 important innovations-ranging from the electric light to the World Wide Web-they demonstrate the importance of pure-play investment opportunities, naive investors, and powerful narratives in allowing runaway speculation that overwhelms the moderating forces of imitation, entry, and competition. This is must reading for anyone interested in how new technologies develop, how they are perceived when they first occur, and how some generate clear bubbles. -- Richard Rumelt, Professor Emeritus Goldfarb and Kirsch possess a keen understanding of the history of technological innovation and the evolution and implementation of new technologies and their respective impact on society. Their work sheds light on causal factors that were not previously well understood with respect to technological innovation and the underlying dynamics which lead innovation to spawn speculative bubbles. Bubbles and Crashes provides important insights for both investors and policy makers to recognize bubbles and implement policies to minimize their impact. -- Jonathan Rosenberg, Senior Vice President