Download this Paper Open PDF in Browser

A Psychoanalytic Interpretation of Dot.Com Stock Valuations

27 Pages Posted: 6 Mar 2005  

David Tuckett

University College London (UCL)

Richard Taffler

Manchester Business School

Date Written: March 1, 2005


Financial economists are unable to provide plausible explanations for Internet stock valuations during the recent asset pricing bubble consistent with market rationality. Adopting a psychoanalytic perspective, this paper argues that investors became caught up emotionally with the drama leading to market prices departing in such an extreme way from fundamental value. Specifically, we propose a psychoanalytic theory of mental objects and show how this helps explain what actually took place during the different phases of mania. The paper concludes, more generally, that an understanding of how emotions determine psychic reality in stock valuations can usefully complement the contribution of conventional normative asset pricing models.

Keywords: stocks, mania, valuation models, psychoanalysis, mental objects

JEL Classification: G10, G12

Suggested Citation

Tuckett, David and Taffler, Richard, A Psychoanalytic Interpretation of Dot.Com Stock Valuations (March 1, 2005). Available at SSRN: or

David Tuckett

University College London (UCL) ( email )

Gower Street
London, WC1E 7HU
United Kingdom


Richard Taffler (Contact Author)

Manchester Business School ( email )

Crawford House
Oxford Road
Manchester M13 9PL
United Kingdom

Paper statistics

Abstract Views