Ethnic diversity reduces risk of market bubbles
Tuesday, November 18, 2014 - 05:50
in Psychology & Sociology
If they consider it at all, investors likely regard ethnic diversity as a matter of social policy. But new research by an MIT Sloan professor suggests a much more practical reason to consider diversity: compared to markets comprised of ethnically homogeneous traders, ethnically diverse markets tend to price assets more accurately and are less susceptible to market bubbles.