# Greater Fool Theory
The greater fool theory is a thesis in economics that market participants can sometimes profit from the purchase (i.e. [speculation](speculation.md)) of overvalued assets ,  assets whose [market value](market-value.md) drastically exceeding their [fundamental-value](fundamental-value.md) ,  if those assets can later be resold at an even higher price to another market participant who makes the same assumption and so on ad infinitum.

The greater fool theory presumes an infinite chain of fools in order for all participants to profit or  "make it" or profit from the [bubble](bubble.md).

## References
1. Mackay, Charles. 2012. Extraordinary Popular Delusions and the Madness of Crowds. Simon and Schuster.
1. Bernstein, William J. 2021. The Delusions of Crowds: Why People Go Mad in Groups. Grove Press.
1. Blanchard, Olivier J, and Mark W Watson. 1982. ‘Bubbles, Rational Expectations and Financial Markets’. NBER Working Paper, no. w0945.
1. Caferra, Rocco, Gabriele Tedeschi, and Andrea Morone. 2021. ‘Bitcoin: Bubble That Bursts or Gold That Glitters?’ Economics Letters 205: 109942. https://doi.org/10.1016/j.econlet.2021.109942.
1. Chancellor, Edward. 1999. ‘Devil Take the Hindmost: A History of Financial Speculation’.
1. Demmler, Michael, and Amilcar Orlian Fernández Domínguez. 2021. ‘Bitcoin and the South Sea Company: A Comparative Analysis’. Revista Finanzas y Política Económica 13 (1): 197–224.
1. Smales, L. A. 2022. ‘Investor Attention in Cryptocurrency Markets’. International Review of Financial Analysis 79: 101972. https://doi.org/10.1016/j.irfa.2021.101972.