October 29, 1929 is known as the day that launched the worst economic decline in the history of the Western world: The Great Depression. Black Tuesday, named for the devastating stock market crash, resulted in the loss of billions of dollars, destroyed the United States economy, and financially ruined thousands of investors—all in a single day.

The crash erupted out of a decade of expansion fueled by excess, debt, and investment into risky assets. At the end of the 20s, the bubble—built on a shaky foundation of over-valued stocks, amidst declining production, low wages, and large loans—finally burst, with catastrophic consequences.

The steep booms and busts that are born when traders collectively overvalue an asset, pushing its price far above its value, are incredibly dangerous. The United States—along with economies around the world—is still struggling against the effects of the 2008 financial crisis caused when the housing bubble burst.

Bubbles can be difficult to battle. But, according to a team of international researchers, there’s one market condition that mitigates the risks—it all comes down to increased ethnic diversity.

A study published in multidisciplinary scientific journal, The Proceedings of the National Academy of Sciences (PNAS), and posted in Reddit’s Science community Thursday, shows that pricing is close to 60 percent more accurate in ethnically diverse markets. Investors actually make better decisions when they aren’t surrounded by people they perceive to be just like them.

To evaluate the economic effects of diversity globally, researchers recreated markets from Southeast Asia and North America, which both have “distinct and non-overlapping” ethnic groups.

After recruiting experts in finance and business to participate, the researchers set up simulated stock trading for both markets. They grouped them so that for each simulation there was a group that was ethnically the same (based on the “dominant ethnicity in the locale”), or diverse (which included members of ethnic minorities). During the experiment, the investors were able to observe all members of their groups and were also informed about their various ethnicities.

What they found was that trading prices in their simulated diverse markets were much lower and much closer to the actual value of the asset—and the investment errors that cause bubbles were much less common.

The researchers also found that, because the surges in pricing were less steep, when bubbles did form, they didn’t do as much damage:

“We find that bubbles in homogenous markets burst more severely,” the researchers write. “Diversity softens the blow: Even if diverse markets occasionally move away from true values, crashes are significantly less severe.”

The researchers reported that their findings are likely due to trust—or more specifically a lack of trust. They believe that the results come from higher investor scrutiny that occurs when traders are not surrounded by others who are just like them. Distrust, it turns out, is essential for market efficiency:

“Ethnic diversity facilitates friction. This friction can increase conflict in some group settings, whether a work team, a community, or a region. Conversely, ethnic homogeneity may induce confidence, or instrumental trust in others’ decisions (confidence not necessarily in their benevolence or morality, but in the reasonableness of their decisions, as captured in such everyday statements as “I trust his judgment”). However, in modern markets, vigilant skepticism is beneficial; overreliance on others’ decisions is risky.

While the authors don’t offer specific policy recommendations based on their results, they do emphasize that their findings imply that social factors weigh heavily on decision-making and might help public officials better understand the mechanisms that lead to bursting bubbles.

“Diversity facilitates friction. In markets, this friction can disrupt conformity, interrupt taken-for-granted routines, and prevent herding,” they write. The presence of more than one ethnicity fosters greater scrutiny and more deliberate thinking, which can lead to better outcomes.”