Neurochemically speaking, optimism leads to increased frontal cortical activity which itself is a strong predictor of idea generation and overall liveliness of thought. Pessimism does the opposite.

Herd behavior is also a trait left over from out hunter/gatherer days. This is well know by the masters of finance, though they are not immune.

Rational thought was developed much later on down the evolutionary trail, thus not as dominate. Magical thinking still rules the species.

Bubble buyer behavior is a combination of the two evolutionary biases, usurping rational thought.

Humans also have a proclivity for trusting authority. I imagine this was developed by people who listened to their parents not to eat that berry or touch that snake had a better survival rate than those that did not.

The bubble was exacerbated by authority figures feeding the fire and amplified by the media.

People were just being typical humans. Trusting authorities and following the tribe.