We accept that many people were nuts for buying such expensive homes they couldn't afford. But now our prejudices have some academic backing.

The field of behavioral economics predicts that people will not only make irrational economic decisions, but that those decisions can lead to mass delusion if widespread enough.

Business Week has taken up the topic in an interview with Duke University economist Dan Ariely.

I have one quibble with this professor. In the third question about subprime mortgages, he assumes that most people would strive to avoid foreclosure. I think he's ignoring the millions of homes that sold to investors who had no skin in the game.

Once housing values tanked and those homes became lousy investments, hundreds of thousands of speculators let their obligations slide. In other words, their behavior was rational, if not entirely admirable.