When predicting the future trend, we use the underlying fact/s as a guide line. 當越多evidences support our prediction 我們越容易相信我們的prediction.
若當evidences/facts 是因之前的predictions才產生 這就會產生bubble effect.
for example,
Fact: Apple shortage *1
prediction: we believe that the future price of apple is gonna be very expensive. some people will start reacting the the prediction by buying more apple now, which bids up the price of apple. so price of apple indeed become more expensive. (then we can ask whehter is the prediction successfully predicting the trend or is the prediction the main cause the price increase?)
Bubble effect: Since we have more evidences now that price of apple is raising. our belief of future trend 越強烈. then more people react to this new evidence/s and try to reap the future gain from the current cheap bargin. (Note: everyone is react independently, no one fully knows other people's actions or intentions.)
the only underlying rigid fact that we have is *1, but the event is inflating the bubble by reacting to more evidences. 蘋果的價錢變的比預期或正常的漲幅還貴
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