Herd behavior can make us do stupid things -- a phenomenon that's no stranger to Wall Street. Now, it turns out, we could be even more prone to blindly mimicking others when those others happen to look like us. Researchers at Columbia University found that stock market traders in ethnically homogeneous groups are more likely to accept speculative prices and overprice stocks, leading to more frequent bubbles. Meanwhile, groups of ethnically-diverse traders are 58 percent better at pricing stocks...
Herd behavior can make us do stupid things -- a phenomenon that's no stranger to Wall Street. Now, it turns out, we could be even more prone to blindly mimicking others when those others happen to look like us. Researchers at Columbia University found that stock market traders in ethnically homogeneous groups are more likely to accept speculative prices and overprice stocks, leading to more frequent bubbles. Meanwhile, groups of ethnically-diverse traders are 58 percent better at pricing stocks...
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