I've been reading a classic of popular science, Richard Dawkins' The Selfish Gene and since I can't read anything without my trading-tinted glasses, this two sentences leapt at me:
"...group extinction is a slow process compared with the rapid cut and thrust of individual competition. Even while the group is going slowly and inexorably downhill, selfish individuals prosper in the short term at the expense of altruists."
This strikes me as particularly applicable to bubbles in general. "The group" (to which we could substitute "the market") knows the bubble will burst eventually but many "selfish individuals" (read "smart traders") benefit from it in the short term at the expense of "altruists" (read "suckers" or "public investors"), so nothing is done and the bubble does burst.
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