Around the globe, economists affect markets by saying what markets are doing, what they should do, and what they will do. Increasingly, experimental economists are even designing real-world markets. But, despite these facts, economists are still largely thought of as scientists who merely observe markets from the outside, like astronomers look at the stars. Do Economists Make Markets? boldly challenges this view. It is the first book dedicated to the controversial question of whether economics is performative--of whether, in some cases, (...) economics actually produces the phenomena it analyzes.The book's case studies--including financial derivatives markets, telecommunications-frequency auctions, and individual transferable quotas in fisheries--give substance to the notion of the performativity of economics in an accessible, nontechnical way. Some chapters defend the notion; others attack it vigorously. The book ends with an extended chapter in which Michel Callon, the idea's main formulator, reflects upon the debate and asks what it means to say economics is performative.The book's insights and strong claims about the ways economics is entangled with the markets it studies should interest--and provoke--economic sociologists, economists, and other social scientists.In addition to the editors and Callon, the contributors include Marie-France Garcia-Parpet, Francesco Guala, Emmanuel Didier, Philip Mirowski, Edward Nik-Khah, Petter Holm, Vincent-Antonin Lépinay, and Timothy Mitchell. (shrink)

In a talk in 2013, Karin Knorr Cetina referred to ‘the interaction order of algorithms’, a phrase that implicitly invokes Erving Goffman's ‘interaction order’. This paper explores the application of the latter notion to the interaction of automated-trading algorithms, viewing algorithms as material entities (programs running on physical machines) and conceiving of the interaction order of algorithms as the ensemble of their effects on each other. The paper identifies the main way in which trading algorithms interact (via electronic ‘order books’, (...) which algorithms both ‘observe’ and populate) and focuses on two particularly Goffmanesque aspects of algorithmic interaction: queuing and ‘spoofing’, or deliberate deception. Following Goffman's injunction not to ignore the influence on interaction of matters external to it, the paper examines some prominent such matters. Empirically, the paper draws on documentary analysis and 338 interviews conducted by the author with high-frequency traders and others involved in automated trading. (shrink)

This article argues that modern finance should be an important object of attention. Particularly worthy of study are three demarcations: the changing disciplinary boundary of economics, the distinction between private and public knowledge, and the legal and cultural demarcation between legitimate trading and gambling. The balance between what Barnes calls N-type and S-type terms in finance is different from, for example, that in physics, but that is no criticism of finance theory: the activities of those who disbelieve finance theory’s efficient (...) market hypothesis probably make the hypothesis more true. The case of Black-Scholes-Merton option pricing theory is drawn on to argue that the loops of self-reference intrinsic to S-terms seem predominantly performative: they increase the truth of finance theory’s typical assumptions. S-loops in the financial markets do not always promote stability, however, as is shown here by a case study of the fate of the hedge fund, Long-Term Capital Management. (shrink)

Summary Peter Bowler's account of the biology and social views of E. W. MacBride is to be welcomed. He is correct in saying that the case of MacBride, who was both a Lamarckian and a Right-wing eugenist, ought to remind us that scientific theories bear no intrinsic, logically inherent, political implications. But it would be wholly mistaken to attribute the view that theories do contain such implications to the sociology of scientific knowledge. It is one that no consistent proponent of (...) the sociology of scientific knowledge can or does accept. As Bowler says, and as sociologists of scientific knowledge have long asserted, links between scientific theories and political positions are features of particular social circumstances. These connections can always, in principle, be broken or revised, and in practice they fairly frequently are. (shrink)