We tend to use irrational guidelines such as perceived fairness and loss aversion, which are based on emotions, attitudes and memories, not logic.

FORBES: 5 Nobel Prize-Winning Economic Theories You Should Know About

Behaviorists reject the classic economic theory of human beings as ultra-rational self-interested actors and, drawing on psychology, examine the causes of seemingly irrational economic choices, such as not taking advantage of money offered in an employer-provided retirement plan or giving away more money to charity than can be explained by purely selfish motives.

NEWYORKER: Money Talks

Mr Mishkin, a former Fed governor, draws a contrast between credit-boom bubbles and irrational exuberance in stockmarkets, such as the dotcom bubble.

ECONOMIST: What regulators should do now

Reflecting such optimism (as well as a certain measure of irrational exuberance), China's Shanghai Composite Index holds a 140% gain for the past 52 weeks.

FORBES: Global Supermarket

People with anxiety disorders feel excessive or irrational worry and can have anxiety-related physical symptoms, such as fatigue, headaches, trembling, sweating, panic, and nausea.

CNN: Study: Anxiety in youth linked to heart attacks later on