CONCEPT
Euphoria Stage
The third stage of Kindleberger's taxonomy — the contamination of the analytical process by the returns it has already generated, producing logically valid inferences from premises the mania itself has distorted.
Euphoria is not a failure of logic but a contamination of premises. The euphoric participant makes correct inferences from a contaminated evidential base — the technology works, the early returns are genuine, the extrapolation appears reasonable. Each step in the reasoning is valid. The conclusion is wrong, or more precisely right about direction but catastrophically wrong about magnitude and timeline. Kindleberger documented this mechanism across every mania he studied: the euphoric gap between what a displacement demonstrably does and what the market believes it will do is the space the credit expansion fills and the space whose closing defines the critical stage.
In The You On AI Field Guide
The psychology of euphoria has been studied extensively since Kindleberger's original formulation. Confirmation bias leads participants to seek supporting evidence and discount contradicting evidence. Availability bias overweights vivid examples — the twenty-fold multiplier, the engineer who built a product in a weekend — while underweighting representative experiences. Anchoring calibrates expectations to extreme data