VCs would knowingly fund a bubble if they thought they would still make money after it burst. Similarly, before 2008, mortgage lenders knowingly lent to borrow

VCs would knowingly fund a bubble if they thought they would still make money after it burst. Similarly, before 2008, mortgage lenders knowingly lent to borrowers who were very likely to default, because the lenders knew they would be able to bundle and sell off the mortgages before they went bad. Investors who know there is a bubble will not always sell right away -- they will wait until their investments grow even more, and then sell before the crash. Some will pull this off, and some won't. So, knowledge that we are in a bubble won't always remove the incentives that created the bubble. That's why bubbles keep happening.