Regarding the price that people are willing to pay for Bitcoin, what has become relevant is how people judge, not merely other people's willingness to pay, but

Regarding the price that people are willing to pay for Bitcoin, what has become relevant is how people judge, not merely other people's willingness to pay, but other people's estimate of how others might be willing to pay. Relevant here is the Keynesian beauty contest, a reference to a practice in which towns used to give awards to those who could get guess who the prettiest girl in town was, with "prettiest" being determined by the other people in town: "It is not a case of choosing those that, to the best of one's judgment, are really the prettiest, nor even those that average opinion genuinely thinks the prettiest. We have reached the third degree where we devote our intelligences to anticipating what average opinion expects the average opinion to be. And there are some, I believe, who practice the fourth, fifth and higher degrees." (Keynes, General Theory of Employment Interest and Money, 1936). http://en.wikipedia.org/wiki/Keynesian_beauty_contest http://en.wikipedia.org/wiki/Keynesian_beauty_contest