Could you please explain, in layman's terms, how exactly do bubbles form and operate within the realm of financial markets? I'm particularly interested in understanding the mechanisms behind their emergence, growth, and ultimately, the burst that often characterizes their demise. Could you also elaborate on the role of investors' behavior and market psychology in these processes? It would be helpful if you could provide some real-world examples to illustrate your explanation. Thank you for your time and expertise in this matter.