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Question 3 Shiller argues that herd behavior can go both ways: It explains the housing bubble, but it also explains the bust.

Question 3
Shiller argues that herd behavior can go both ways: It explains the housing bubble, but it also explains the bust. As he notes, “Rational individuals become excessively pessimistic as they see others bidding down home prices to abnormally low levels.” Do you agree with Shiller?


Question 4
How might organizations combat the problems resulting from herd behavior?

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