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Dear all - welcome to workshop's wiki, Two general principles lead us when we developed the concept of the workshop.
First, use the strengths of each medium. That means that getting acquainted with the material will be done here, on the wiki. This also means that the workshop itself, an interactive face-to-face event, will be used as the arena where we will flesh out the important concepts of SSF and together develop an informed, exciting, high-level discussion.
Second, design the workshop for researchers. We see the analytical approaches that underpin SSF as primarily research-oriented. Hence, the reading material was chosen to assist your (present or future) research projects. There is a core of analytical papers and book chapters (“core reading”) and ‘surrounded’ by a variety of empirical papers (the various topics). Read the core papers thoroughly and then look at the other sources and decide which you would like to focus on. In the workshop we will not cover in depth each and every paper here. Instead, we will follow a demand-driven model: the concepts and cases that will generate interesting comments and discussions here in the wiki will get more air time at the workshop.
Finally, SSF is a young field and this is the first time we are running this workshop. So, comments (‘paper X should be included’, ‘theory Y is very relevant and calls for discussion’, ‘I would have categorised the papers differently’ etc.) are more than welcome.
Yuval Millo Daniel Beunza |
>> Start here: principles and practices |
Hi Yuval and Daniel,
Many thanks to you both for all your efforts so far!
Can I ask you to clarify what it is you are hoping to achieve pre-workshop? And what you hope we will do? Is the intention that, having read the books and papers we flag up those books/papers that we think are interesting, for further discussion? Or points made in these? Or would you welcome suggestions on general themes and topic for discussion? Are we invited to start discussion strings on key issues - and then, how much discussion do you want in the string, and how much saved over for the workshop? What are the outputs you hope for?
I know (well, hope) we are a smarter crowd than second year undergrads, but my experiences of pedagogic blank canvasses is that they often stay blank - maybe you and Daniel would flag up some key areas for people to voice initial feelings, comments, areas of confusion or initial interest, just to get things going?
Just thoughts - Philip
Philip, thanks for this.
We intentionally did not prescribe topics for discussion because we do not want to exclude, even implicitly anyone’s research topic .So, yes; the intention is that having read the core reading, people would be able to point out the interesting topics. That is, for example, the concepts they find useful or the ones with which they may not agree. There are no planned deliverables, but we look at the emerging discussion as some kind of indication as to the attractive directions.
That said, we are well aware of the potential ‘blank canvas’ so here a few general perspectives that may help in kick-starting discussions.
First, the hybridism of market: economic agents are no longer strictly humans but humans and technological artifacts. Mainstream economic theory and empirical research hardly touch this point. What can SSF say about this?
Second, markets do not end where trading floors do: experts and expert knowledge affect the behavior and shaping of markets (i.e. performativity). Again, this is a point that is, by and large, neglected by both economics and most of economic sociology. SSF can (and does) say interesting things about this phenomenon.
Third, there is a tension between the particular and the reproducible in financial markets. Economic sociology and SSF show us that different markets are different institutions and that these differences account for different strands of market behavior. However, organizational and technological modes of operation are ‘copied’ across markets. Does this mean that there is market DNA of some sort?
Yuval
I have been seeing an increasing number of stories about the underlying problems that are causing the financial markets to collapse. I am wondering if we have something valuable to add to this discussion.
There are lots of stories about irrational exuberance. Today, for instance, the BBC reports that traders' testosterone levels may drive them to take unwarranted risks. http://news.bbc.co.uk/2/hi/health/7342923.stm These stories indicate an appetite for an explanation of the most recent bonfires of the vanities.
I wonder, though, if there is not also a story to be told about the end of decades of arbitrage based upon the calculative devices invented by the heirs of Modigliani and Miller. We invent new financial instruments and do not use them to create value, but to extract and appropriate it.
And now it's gone. There is no where else to hide risk, no instruments to distribute it, no time to extend the paybacks, no more credit to extend. Our financial algorithms are exhausted like our lines of credit.
Performativity research talks about the creation of markets. Can we also explain their demise?
This nice piece was from Bloomberg http://www.bloomberg.com/apps/news?pid=20601109&sid=aMX2xgJrrGB8&refer=home
The calculative devices are revealed, like the emperor's clothes, to be insubstantial. What does this mean to us? What can we mean to the analysis of the issue?
"Some credit-default indexes have morphed into what Wachovia Corp. analysts led by Glenn Schultz call ``Frankenstein's monster'' because they now often drive prices in the so-called cash bond market, rather than the other way around. Fearing a repeat of losses, banks are refusing to support new indexes that would allow investors to wager on everything from auto loans to European mortgages, reining in a market that's about doubled in size every year for the past decade.
``The indices are just trading on their own account with no relationship whatsoever to an underlying cash market that's ceased to exist,'' Jacques Aigrain, chief executive officer of Zurich-based Swiss Reinsurance Co., said at a March 18 insurance conference in Dubai.
<snip>
``ABX, CMBX, any kind of X you like, are totally uncorrelated to any kind of underlying market,'' Swiss Re's Aigrain said at the Dubai conference. "
Thanks a lot Alison, these are very nice points you raise here. About performativity the emergence of systemic market risks (what you call 'demise of markets'). Yes, the literature does talk about it. In fact, you can take a look at the papers in the 'Networked risk' section. Especially Izquierdo (for general conceptual approach) and Holzer&Millo (for specific case studies about arbitrage). The second quote, about the independence of derivative markets from movements in the markets for underlying (of course, completely in contradiction with what fin econ says) is covered in the first case study in Holzer&Millo.
Guess I better get my reading done. ;-)