Excitement

The graph is from the new paper "Bubbling with Excitement: An Experiment" by Lin, Odean, and Andrade (March 2012). They conclude:

Historical accounts suggest that rapid, unexpected increased in wealth during the appreciation phase of asset pricing bubbles can lead investors to experience intense, positive emotions. We document, in an experimental setting, that magnitude and amplitude of bubbles is greater when prior to trading traders experience high intensity, positive emotions than when they experience low intensity, neutral emotions, or high intensity, negative emotions. Thus rapidly rising prices may trigger the very emotions that lead to larger asset pricing bubbles.

From the experimental design:

In our first series of 16 experimental markets, participants in 8 markets watched an exciting and upbeat video clip involving a chase scene (excitement condition), while participants in the other 8 markets watched a clip from a slow paced historical documentary (neutral condition).In the second series of 16 markets, participants in 8 markets watched an exciting and upbeat video clip from a different movie also involving a chase scene (excitement condition), while participants in the other 8 markets watched a frightening scene from a horror movie (fear condition). In the third series of 16 markets, participants in 8 markets watched one of the two exciting video clips used in the first two series (excitement condition), while participants in the other 8 markets watched one of two video clips of sad scenes from dramas (sad condition). The reported emotional experience after the video clip(s) confirmed our expectations.