Market crashes aren't just bad luck—they're what happens when the math of the market literally runs out of room to move.
March 27, 2026
Original Paper
Market Behavior: The Structural Drivers of Bubbles and Panics
SSRN · 6206138
The Takeaway
Rather than blaming crashes on irrational people, this paper models markets as geometric shapes that occasionally 'collapse' when a single narrative becomes too dominant. In these moments, the math of the system forces everyone to act in sync, meaning individual choice actually disappears until a circuit breaker restores 'dimensionality' to the market.
From the abstract
Financial markets routinely transition between stable and unstable regimes, yet traditional explanations-irrational behavior, exogenous shocks, or information imperfections-fail to account for the structural coherence of bubbles, panics, and liquidity crises. This paper presents a unified framework in which markets are modeled as orientation-sensitive manifolds whose stability depends on the dimensionality of the trajectories available to participants. We identify presentation-driven trajectory