--- title: "Ethnic diversity deflates price bubbles" url: "https://conversion.stevebaka.de/studien/10-1073-pnas-1407301111/" type: "study" language: de-DE description: "Markets are central to modern society, so their failures can be devastating. Here, we examine a prominent failure: price bubbles. Bubbles emerge when traders err collectively in pricing, causing misfit between market prices and the true values of assets. The causes of such collective errors remain elusive. We propose that bubbles are affected by ethnic homogeneity in the market and can be thwarted by diversity. In homogenous markets, traders place undue confidence in the decisions of others. Less likely to scrutinize others' decisions, traders are more likely to accept prices that deviate from true values. To test this, we constructed experimental markets in Southeast Asia and North America, where participants traded stocks to earn money. We randomly assigned participants to ethnically homogeneous or diverse markets. We find a marked difference: Across markets and locations, market prices fit true values 58% better in diverse markets. The effect is similar across sites, despite sizeable differences in culture and ethnic composition. Specifically, in homogenous markets, overpricing is higher as traders are more likely to accept speculative prices. Their pricing errors are more correlated than in diverse markets. In addition, when bubbles burst, homogenous markets crash more severely. The findings suggest that price bubbles arise not only from individual errors or financial conditions, but also from the social context of decision making. The evidence may inform public discussion on ethnic diversity: it may be beneficial not only for providing variety in perspectives and skills, but also because diversity facilitates friction that enhances deliberation and upends conformity." --- # Ethnic diversity deflates price bubbles > Ethnic diversity deflates price bubbles: Markets are central to modern society, so their failures can be devastating. Here, we examine a prominent failure: price bubbles. Bubbles emerge when traders err collectively in pricing, causing misfit between market prices and the true values of assets. The causes of such collective errors remain elusive. We propose that bubbles are affected by ethnic homogeneity in the market and can be thwarted by diversity. In homogenous markets, traders place undue confidence in the decisions of others. Less likely to scrutinize others' decisions, traders are more likely to accept prices that deviate from true values. To test this, we constructed experimental markets in Southeast Asia and North America, where participants traded stocks to earn money. We randomly assigned participants to ethnically homogeneous or diverse markets. We find a marked difference: Across markets and locations, market prices fit true values 58% better in diverse markets. The effect is similar across sites, despite sizeable differences in culture and ethnic composition. Specifically, in homogenous markets, overpricing is higher as traders are more likely to accept speculative prices. Their pricing errors are more correlated than in diverse markets. In addition, when bubbles burst, homogenous markets crash more severely. The findings suggest that price bubbles arise not only from individual errors or financial conditions, but also from the social context of decision making. The evidence may inform public discussion on ethnic diversity: it may be beneficial not only for providing variety in perspectives and skills, but also because diversity facilitates friction that enhances deliberation and upends conformity. Evidenzgrad C, Risk of Bias unclear. ## Quelle Autor:innen: Sheen S. Levine, Evan P. Apfelbaum, Mark Bernard, Valerie Bartelt, Edward J. Zajac, David Stark Jahr: 2014 Journal/Quelle: Proceedings of the National Academy of Sciences DOI: 10.1073/pnas.1407301111 APA: Levine, S. S., Apfelbaum, E. P., Bernard, M., Bartelt, V., Zajac, E. J., & Stark, D. (2014). Ethnic diversity deflates price bubbles. Proceedings of the National Academy of Sciences. https://doi.org/10.1073/pnas.1407301111 Zitationen laut Paper-Korpus: 257 ## Forschungsfrage / Summary Markets are central to modern society, so their failures can be devastating. Here, we examine a prominent failure: price bubbles. Bubbles emerge when traders err collectively in pricing, causing misfit between market prices and the true values of assets. The causes of such collective errors remain elusive. We propose that bubbles are affected by ethnic homogeneity in the market and can be thwarted by diversity. In homogenous markets, traders place undue confidence in the decisions of others. Less likely to scrutinize others' decisions, traders are more likely to accept prices that deviate from true values. To test this, we constructed experimental markets in Southeast Asia and North America, where participants traded stocks to earn money. We randomly assigned participants to ethnically homogeneous or diverse markets. We find a marked difference: Across markets and locations, market prices fit true values 58% better in diverse markets. The effect is similar across sites, despite sizeable differences in culture and ethnic composition. Specifically, in homogenous markets, overpricing is higher as traders are more likely to accept speculative prices. Their pricing errors are more correlated than in diverse markets. In addition, when bubbles burst, homogenous markets crash more severely. The findings suggest that price bubbles arise not only from individual errors or financial conditions, but also from the social context of decision making. The evidence may inform public discussion on ethnic diversity: it may be beneficial not only for providing variety in perspectives and skills, but also because diversity facilitates friction that enhances deliberation and upends conformity. ## Methode und Evidenzqualität [Studien](/studien/)typ: Studie Risk of Bias: unclear Evidenzgrad: C ## Key Findings Evidence-Fill Queue: Findings werden aus Volltext, Abstract und Review-Notizen konsolidiert. ## Effektgrößen / Outcomes Evidence-Fill Queue: Effektgrößen und Outcomes werden aus Volltext-Extraktionen priorisiert. ## Conversion-Implikationen Evidence-Fill Queue: Conversion-Implikationen werden nur ausgespielt, wenn Mechanismus, Kontext und Messgröße ableitbar sind. ## Limitationen Evidence-Fill Queue: Limitationen werden aus Risk-of-Bias-, Sample- und Methodikfeldern ergänzt. ## Verknüpfte Konzepte - [Anchoring](/konzepte/anchoring/) - [Loss Aversion](/konzepte/loss-aversion/) ## Unterstützte Claims - [Preisreduktionen, Subventionen, Steuern oder finanzielle Anreize können Kauf-, Verkaufs- und Konsumentscheidungen beeinflussen.](/claims/price-and-financial-incentives-change-purchase-behavior/) ## FAQ ### Worum geht es in dieser Studie? Ethnic diversity deflates price bubbles: Markets are central to modern society, so their failures can be devastating. Here, we examine a prominent failure: price bubbles. Bubbles emerge when traders err collectively in pricing, causing misfit between market prices and the true values of assets. The causes of such collective errors remain elusive. We propose that bubbles are affected by ethnic homogeneity in the market and can be thwarted by diversity. In homogenous markets, traders place undue confidence in the decisions of others. Less likely to scrutinize others' decisions, traders are more likely to accept prices that deviate from true values. To test this, we constructed experimental markets in Southeast Asia and North America, where participants traded stocks to earn money. We randomly assigned participants to ethnically homogeneous or diverse markets. We find a marked difference: Across markets and locations, market prices fit true values 58% better in diverse markets. The effect is similar across sites, despite sizeable differences in culture and ethnic composition. Specifically, in homogenous markets, overpricing is higher as traders are more likely to accept speculative prices. Their pricing errors are more correlated than in diverse markets. In addition, when bubbles burst, homogenous markets crash more severely. The findings suggest that price bubbles arise not only from individual errors or financial conditions, but also from the social context of decision making. The evidence may inform public discussion on ethnic diversity: it may be beneficial not only for providing variety in perspectives and skills, but also because diversity facilitates friction that enhances deliberation and upends conformity. Evidenzgrad C, Risk of Bias unclear. ### Welche Evidenz wird genutzt? Die Seite nutzt Claims, Studien, Use Cases und Quellen aus dem SurrealDB Knowledge Graph der Conversion-Psychologie-Wissensbasis. ### Ist die Ausgabe auf Deutsch verfügbar? Ja. Alle menschenlesbaren Inhalte und Agent-Ausgaben sind standardmäßig deutsch. ## Quellen - Levine, S. S., Apfelbaum, E. P., Bernard, M., Bartelt, V., Zajac, E. J., & Stark, D. (2014). Ethnic diversity deflates price bubbles. Proceedings of the National Academy of Sciences. https://doi.org/10.1073/pnas.1407301111 [Quelle öffnen](https://doi.org/10.1073/pnas.1407301111) ## JSON-LD ```json { "@context": "https://schema.org", "@graph": [ { "@type": "WebSite", "@id": "https://conversion.stevebaka.de/#website", "url": "https://conversion.stevebaka.de", "name": "conversion.stevebaka.de", "description": "Deutschsprachige Wissensbasis und Audit-Plattform für evidenzbasierte Conversion-Psychologie.", "publisher": { "@id": "https://conversion.stevebaka.de/#organization" } }, { "@type": "Organization", "@id": "https://conversion.stevebaka.de/#organization", "name": "conversion.stevebaka.de", "url": "https://conversion.stevebaka.de", "parentOrganization": { "@id": "https://stevebaka.de/#organization" }, "sameAs": [ "https://stevebaka.de" ] }, { "@type": "Person", "@id": "https://conversion.stevebaka.de/autoren/steve-baka/#person", "name": "Steve Baka", "url": "https://conversion.stevebaka.de/autoren/steve-baka/", "sameAs": [ "https://stevebaka.de" ], "jobTitle": "Conversion- und AI-Infrastructure-Berater", "knowsAbout": [ "Conversion-Psychologie", "Verkaufspsychologie", "Behavioral Science", "GraphRAG", "SurrealDB", "D-A-CH Conversion Optimierung" ] }, { "@type": "WebPage", "@id": "https://conversion.stevebaka.de/studien/10-1073-pnas-1407301111/#webpage", "url": "https://conversion.stevebaka.de/studien/10-1073-pnas-1407301111/", "name": "Ethnic diversity deflates price bubbles", "description": "Markets are central to modern society, so their failures can be devastating. Here, we examine a prominent failure: price bubbles. Bubbles emerge when traders err collectively in pricing, causing misfit between market prices and the true values of assets. The causes of such collective errors remain elusive. We propose that bubbles are affected by ethnic homogeneity in the market and can be thwarted by diversity. In homogenous markets, traders place undue confidence in the decisions of others. Less likely to scrutinize others' decisions, traders are more likely to accept prices that deviate from true values. To test this, we constructed experimental markets in Southeast Asia and North America, where participants traded stocks to earn money. We randomly assigned participants to ethnically homogeneous or diverse markets. We find a marked difference: Across markets and locations, market prices fit true values 58% better in diverse markets. The effect is similar across sites, despite sizeable differences in culture and ethnic composition. Specifically, in homogenous markets, overpricing is higher as traders are more likely to accept speculative prices. Their pricing errors are more correlated than in diverse markets. In addition, when bubbles burst, homogenous markets crash more severely. The findings suggest that price bubbles arise not only from individual errors or financial conditions, but also from the social context of decision making. The evidence may inform public discussion on ethnic diversity: it may be beneficial not only for providing variety in perspectives and skills, but also because diversity facilitates friction that enhances deliberation and upends conformity.", "inLanguage": "de-DE", "isPartOf": { "@id": "https://conversion.stevebaka.de/#website" }, "breadcrumb": { "@id": "https://conversion.stevebaka.de/studien/10-1073-pnas-1407301111/#breadcrumb" }, "datePublished": "2026-07-01", "dateModified": "2026-07-04", "mainEntity": { "@id": "https://conversion.stevebaka.de/studien/10-1073-pnas-1407301111/#article" } }, { "@type": "ScholarlyArticle", "@id": "https://conversion.stevebaka.de/studien/10-1073-pnas-1407301111/#article", "headline": "Ethnic diversity deflates price bubbles", "name": "Ethnic diversity deflates price bubbles", "description": "Markets are central to modern society, so their failures can be devastating. Here, we examine a prominent failure: price bubbles. Bubbles emerge when traders err collectively in pricing, causing misfit between market prices and the true values of assets. The causes of such collective errors remain elusive. We propose that bubbles are affected by ethnic homogeneity in the market and can be thwarted by diversity. In homogenous markets, traders place undue confidence in the decisions of others. Less likely to scrutinize others' decisions, traders are more likely to accept prices that deviate from true values. To test this, we constructed experimental markets in Southeast Asia and North America, where participants traded stocks to earn money. We randomly assigned participants to ethnically homogeneous or diverse markets. We find a marked difference: Across markets and locations, market prices fit true values 58% better in diverse markets. The effect is similar across sites, despite sizeable differences in culture and ethnic composition. Specifically, in homogenous markets, overpricing is higher as traders are more likely to accept speculative prices. Their pricing errors are more correlated than in diverse markets. In addition, when bubbles burst, homogenous markets crash more severely. The findings suggest that price bubbles arise not only from individual errors or financial conditions, but also from the social context of decision making. The evidence may inform public discussion on ethnic diversity: it may be beneficial not only for providing variety in perspectives and skills, but also because diversity facilitates friction that enhances deliberation and upends conformity.", "inLanguage": "de-DE", "author": { "@id": "https://conversion.stevebaka.de/autoren/steve-baka/#person" }, "publisher": { "@id": "https://conversion.stevebaka.de/#organization" }, "mainEntityOfPage": { "@id": "https://conversion.stevebaka.de/studien/10-1073-pnas-1407301111/#webpage" }, "datePublished": "2026-07-01", "dateModified": "2026-07-04", "citation": [ "https://doi.org/10.1073/pnas.1407301111" ], "mentions": [], "text": "Ethnic diversity deflates price bubbles: Markets are central to modern society, so their failures can be devastating. Here, we examine a prominent failure: price bubbles. Bubbles emerge when traders err collectively in pricing, causing misfit between market prices and the true values of assets. The causes of such collective errors remain elusive. We propose that bubbles are affected by ethnic homogeneity in the market and can be thwarted by diversity. In homogenous markets, traders place undue confidence in the decisions of others. Less likely to scrutinize others' decisions, traders are more likely to accept prices that deviate from true values. To test this, we constructed experimental markets in Southeast Asia and North America, where participants traded stocks to earn money. We randomly assigned participants to ethnically homogeneous or diverse markets. We find a marked difference: Across markets and locations, market prices fit true values 58% better in diverse markets. The effect is similar across sites, despite sizeable differences in culture and ethnic composition. Specifically, in homogenous markets, overpricing is higher as traders are more likely to accept speculative prices. Their pricing errors are more correlated than in diverse markets. In addition, when bubbles burst, homogenous markets crash more severely. The findings suggest that price bubbles arise not only from individual errors or financial conditions, but also from the social context of decision making. The evidence may inform public discussion on ethnic diversity: it may be beneficial not only for providing variety in perspectives and skills, but also because diversity facilitates friction that enhances deliberation and upends conformity. Evidenzgrad C, Risk of Bias unclear. Quelle. Autor:innen: Sheen S. Levine, Evan P. Apfelbaum, Mark Bernard, Valerie Bartelt, Edward J. Zajac, David Stark Jahr: 2014 Journal/Quelle: Proceedings of the National Academy of Sciences DOI: 10.1073/pnas.1407301111 APA: Levine, S. S., Apfelbaum, E. P., Bernard, M., Bartelt, V., Zajac, E. J., & Stark, D. (2014). Ethnic diversity deflates price bubbles. Proceedings of the National Academy of Sciences. https://doi.org/10.1073/pnas.1407301111 Zitationen laut Paper Korpus: 257 Forschungsfrage / Summary. Markets are central to modern society, so their failures can be devastating. Here, we examine a prominent failure: price bubbles. Bubbles emerge when traders err collectively in pricing, causing misfit between market prices and the true values of assets. The causes of such collective errors remain elusive. We propose that bubbles are affected by ethnic homogeneity in the market and can be thwarted by diversity. In homogenous markets, traders place undue confidence in the decisions of others. Less likely to scrutinize others' decisions, traders are more likely to accept prices that deviate from true values. To test this, we constructed experimental markets in Southeast Asia and North America, where participants traded stocks to earn money. We randomly assigned participants to ethnically homogeneous or diverse markets. We find a marked difference: Across markets and locations, market prices fit true values 58% better in diverse markets. The effect is similar across sites, despite sizeable differences in culture and ethnic composition. Specifically, in homogenous markets, overpricing is higher as traders are more likely to accept speculative prices. Their pricing errors are more correlated than in diverse markets. In addition, when bubbles burst, homogenous markets crash more severely. The findings suggest that price bubbles arise not only from individual errors or financial conditions, but also from the social context of decision making. The evidence may inform public discussion on ethnic diversity: it may be beneficial not only for providing variety in perspectives and skills, but also because diversity facilitates friction that enhances deliberation and upends conformity. Methode und Evidenzqualität. Studientyp: Studie Risk of Bias: unclear Evidenzgrad: C Key Findings. Evidence Fill Queue: Findings werden aus Volltext, Abstract und Review Notizen konsolidiert. Effektgrößen / Outcomes. Evidence Fill Queue: Effektgrößen und Outcomes werden aus Volltext Extraktionen priorisiert. Conversion Implikationen. Evidence Fill Queue: Conversion Implikationen werden nur ausgespielt, wenn Mechanismus, Kontext und Messgröße ableitbar sind. Limitationen. Evidence Fill Queue: Limitationen werden aus Risk of Bias , Sample und Methodikfeldern ergänzt. Verknüpfte Konzepte. Anchoring Loss Aversion Unterstützte Claims. 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Here, we examine a prominent failure: price bubbles. Bubbles emerge when traders err collectively in pricing, causing misfit between market prices and the true values of assets. The causes of such collective errors remain elusive. We propose that bubbles are affected by ethnic homogeneity in the market and can be thwarted by diversity. In homogenous markets, traders place undue confidence in the decisions of others. Less likely to scrutinize others' decisions, traders are more likely to accept prices that deviate from true values. To test this, we constructed experimental markets in Southeast Asia and North America, where participants traded stocks to earn money. We randomly assigned participants to ethnically homogeneous or diverse markets. We find a marked difference: Across markets and locations, market prices fit true values 58% better in diverse markets. The effect is similar across sites, despite sizeable differences in culture and ethnic composition. Specifically, in homogenous markets, overpricing is higher as traders are more likely to accept speculative prices. Their pricing errors are more correlated than in diverse markets. In addition, when bubbles burst, homogenous markets crash more severely. The findings suggest that price bubbles arise not only from individual errors or financial conditions, but also from the social context of decision making. The evidence may inform public discussion on ethnic diversity: it may be beneficial not only for providing variety in perspectives and skills, but also because diversity facilitates friction that enhances deliberation and upends conformity. Evidenzgrad C, Risk of Bias unclear." } }, { "@type": "Question", "name": "Welche Evidenz wird genutzt?", "acceptedAnswer": { "@type": "Answer", "text": "Die Seite nutzt Claims, Studien, Use Cases und Quellen aus dem SurrealDB Knowledge Graph der Conversion-Psychologie-Wissensbasis." } }, { "@type": "Question", "name": "Ist die Ausgabe auf Deutsch verfügbar?", "acceptedAnswer": { "@type": "Answer", "text": "Ja. Alle menschenlesbaren Inhalte und Agent-Ausgaben sind standardmäßig deutsch." } } ] } ] } ```