Kindleberger Cycles: Method in the madness of crowds?

Corporate R&D has a social return far above its internal rate of return to the innovating corporation, and so is chronically underfunded from a social perspective. Kindleberger cycles, irregularly recurring stock market manias, panics, and crashes, prominent in financial history, are also a major problem for mainstream economics. If manias inundating “hot” new technologies with capital sufficiently counter chronic underinvestment in innovation, economy-level selection may favor institutions and behavioral norms conducive to Kindleberger cycles despite individual agents’ losses in panics and crashes.