Pleasurable Future Now, Painful Reality Later? Entrepreneurial Positive Future Thinking Predicts Stock Crashes in the Dot-Com Bubble (Burst), 1995-2001

I address the question of why dot-com crashes happened using an unobtrusive measure. Entrepreneurial positive future thinking during the dot-com era predicts higher stock price crash risk (β=0.122**, n=505) in the bubble burst period. The results are consistent across alternative measures of crash risk and the reverse causality is unlikely.