Economists and sociologists seem to think about crowds in a similar way. For the former, crowds create market bubbles or panics with large-scale financial effects. For the latter, crowds lead to the destruction of persons and property. The way each side talks about crowds illustrates the taken-for-granted similarities between economic action and social behavior.

In the 20th century, the majority of economic bubbles centered on real estate and stocks. Economists use the term bubble to refer to any deviation in the price of an asset, security, or commodity. While a crash refers to the collapse of the prices of assets or the failure of a bank, panics may stem from irrational beliefs, fright, or lack of confidence in banks or currency. Two different theories have attempted ...