Reflecting on Markets and Economic reflexivity

An interdisciplinary event on new markets and new ideas to think about
them, bringing together economists, sociologists and philosophers,
organized by the Dpts. of Logic, History and Philosophy of Science +
Social Anthropology (UNED) and the Urrutia Elejalde Foundation at
Medialab Prado (Madrid)

March 21st, [Auditorio Medialab, C/ Alameda, 15 · 28014 Madrid]

16.30-18.00
A Sociology of Algorithms: High-Frequency Trading and the Shaping of Markets
Donald MacKenzie (U. Edinburgh)

18.00-18.30 | Break

18.30-20.00
Performativity Rationalized
Francesco Guala (U of Milan)

For further information: David Teira ([log in to unmask])

Abstracts

A Sociology of Algorithms: High-Frequency Trading and the Shaping of Markets
Donald MacKenzie (U. Edinburgh)

What becomes of economic sociology when markets and most participants in
them are computer algorithms? This paper addresses that question
empirically, drawing on research on the currently most controversial
type of algorithm in financial markets, high-frequency trading (HFT)
algorithms. That research (involving interviews with 33 high-frequency
traders) is embedded in a broader historical-sociological study of the
main markets in which HFT operates.

The paper will begin by sketching (in non-technical terms) three crucial
classes of financial-market algorithm: ‘matching engines’, ‘execution
algorithms’ and HFT algorithms. After explaining in more detail how HFT
algorithms operate, the paper will outline the historical process that
has led to the current prominence of HFT in share-trading in the US.

I will then explore how HFT both shapes and is shaped by the other
institutional/technical ecologies to which it is linked by contrasting
three domains and in each case identifying a particular class of
algorithmic operation that characterises key tensions in each domain:
1. US stock exchanges (characteristic operation: Intermarket Sweep Order);
2. US ‘dark pools’ (characteristic operation: algorithmic surveillance
and ‘boundary work’);
3. Global foreign exchange (characteristic operation: ‘last look’).


Performativity Rationalized
Francesco Guala (U of Milan)

Some critics have argued that the notion of performativity has been used
inappropriately by economic sociologists. As a reply, I illustrate the
Austin-Searle account of speech acts and explain its connection with the
Lewis-Schelling theory of conventions. I argue that a performative
speech act in Austin’s sense is essentially a correlation device and
that economic theories can work as correlation devices in coordination
games, focusing on MacKenzie’s study of the Black-Scholes model of
option pricing. Since Austin’s speech acts and the models of economic
theory perform similar functions, economics can be performative in
Austin’s sense.




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Dr. David Teira
Dpto. de Lógica, Historia y Filosofía de la ciencia (UNED)
http://www.uned.es/personal/dteira/

Consulting Editor | THEORIA
http://www.ehu.es/theoria