The greater fool theory suggests that investors can profit from overvalued assets—items priced far above their intrinsic worth—by selling them to an even "greater fool" at a higher price. This speculative chain works only as long as new, more credulous buyers keep entering the market; eventually, when reality sets in, a sell-off crashes the price toward fair value (sometimes zero), leaving the last buyers "holding the bag." The phenomenon is driven by cognitive biases like herd mentality and fear of missing out, which economist Burton Malkiel famously compared to a Ponzi scheme in his book A Random Walk Down Wall Street. Examples span real estate, stocks, and art—such as hedge fund manager Steven A. Cohen's 2013 auction of recently purchased artworks—as well as cryptocurrencies, which several Nobel laureates argue have no intrinsic value whatsoever. However, the theory doesn't apply in exceptional cases like hyperinflation or remote regions, where high prices reflect genuine necessity and local costs rather than a speculative bubble. Ultimately, the theory highlights how irrational exuberance, rather than fundamental value, often drives financial manias.