(Bloomberg) -- Diversity safeguards populations from defectivegenes, stabilizes nature’s ecosystems and fosters innovation inbusiness.

Now, Bloomberg Markets magazine will report in itsFebruary issue, research suggests that it may protect financialmarkets from manic excess. Bubbles form when traders trust others’judgment without scrutiny, and that happens more in ethnicallyhomogeneous markets, according to a new paper in the Proceedings ofthe National Academy of Sciences by Sheen S. Levine and David Starkof Columbia University.

“You get better information processing in ethnically diversesettings,” Stark, a sociologist, says.

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