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'Bubbles in Society' - The Example of the United States Apollo Program

37 Pages Posted: 4 Jun 2008  

Monika Gisler

ETH Zurich

Didier Sornette

ETH Zürich - Department of Management, Technology, and Economics (D-MTEC); Swiss Finance Institute

Date Written: May 30, 2008

Abstract

We present an analysis of the economic, political and social factors that underlay the Apollo program, one of the most exceptional and costly projects ever undertaken by the United States in peacetime that culminated in 1969 with the first human steps on the Moon. This study suggests that the Apollo program provides a vivid illustration of a societal bubble, defined as a collective over-enthusiasm as well as unreasonable investments and efforts, derived through excessive public and/or political expectations of positive outcomes associated with a general reduction of risk aversion. We show that economic, political and social factors weaved a network of reinforcing feedbacks that led to widespread over-enthusiasm and extraordinary commitment by individuals involved in the project as well as by politicians and by the public at large. We propose the general concept of pro-bubbles, according to which bubbles are an unavoidable development in technological and social enterprise that benefits society by allowing exceptional niches of innovation to be explored.

Keywords: Risk, bubble, Apollo-Program, United States

JEL Classification: D71, D81, Z10

Suggested Citation

Gisler, Monika and Sornette, Didier, 'Bubbles in Society' - The Example of the United States Apollo Program (May 30, 2008). Available at SSRN: https://ssrn.com/abstract=1139807 or http://dx.doi.org/10.2139/ssrn.1139807

Monika Gisler (Contact Author)

ETH Zurich ( email )

Zürichbergstrasse 18
Zurich, 8092
Switzerland

Didier Sornette

ETH Zürich - Department of Management, Technology, and Economics (D-MTEC) ( email )

Scheuchzerstrasse 7
Zurich, ZURICH CH-8092
Switzerland
41446328917 (Phone)
41446321914 (Fax)

HOME PAGE: http://www.er.ethz.ch/

Swiss Finance Institute ( email )

c/o University of Geneve
40, Bd du Pont-d'Arve
1211 Geneva, CH-6900
Switzerland

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