Past events
2005
Markets: Art and Money
Tuesday, December 6, 2005, Goldsmiths
Markets: Art and Money” brings together two world leading thinkers on the social and cultural construction of markets:
Harrison White (Columbia University) "Dynamics of Art Markets”
Donald Mackenzie (University of Edinburgh) “Is Economics Performative? Option Theory and the Construction of Derivatives Markets”
Chair: Scott Lash (Goldsmiths College)
Markets are increasingly seen as the pivot of global capitalism. With the decline of manufacturing and the factory, markets themselves are becoming increasingly performative. Financial markets are ever more a motor of the economy. Culture markets - as the art case - become pervasive. Markets themselves come into view as socially and culturally constructed: as complex, ‘performed’ and founded on social (and post-social) interactions. Markets are no longer sites of assumed equilibrium and analytic boundaries between economy and culture are re-shaped.
Bios and abstracts
Harrison White is well known for his publications on both field studies and mathematical analyses of business firms and market operation. He has also written about control (feedback) systems, sociolinguistics and discourse analysis, narrative genres, combinational and algebraic models in mathematical sociology, and queuing and other stochastic system operation models. In “Dynamics of Art Markets”, Prof. White will extend his theory of producers markets developed in “Markets from Networks: Socioeconomic models of production” (2002) to the art field.Dynamics of Art Markets
This paper contrasts and compares a number of different arts as to the market profile and outcomes to be expected for various contexts, upstream, downstream and cross-stream. Competitors seek sustainable niches, optimal for them, from among the observed array of outcomes. Quality is imputed in this trial-and-error process that fuzzes predictability. Dealer-mediated painting markets are contrasted with various sorts of theatre and with dance venues, specifying for each which contexts can support a viable markets and with what payoffs.
Donald Mackenzie has mainly worked on both Sociology and Social History of Science and Technology and in the increasingly relevant field of Social Studies of Finance. In “Markets: Art and Money”, Prof. Mackenzie will explore the role of finance theory as a cause of financial innovation by exploring the role played by option theory in shaping derivatives markets. As in his later papers in the field, Mackenzie will empirically contrast Michel Callon’s conjecture that economic is performative and make this more precise by distinguishing different levels of performativity.
Is Economics Performative? Option Theory and the Construction of Derivatives Markets
This paper will explore the role of finance theory as a cause of financial innovation by exploring the role played by option theory (especially the Black-Scholes-Merton model) in shaping derivatives markets. The paper’s analytical framework will build upon Michel Callon’s conjecture that economics is performative: i.e. that it contributes to the construction of the phenomena it describes. Four different meanings or levels of “performativity” will be distinguished –
i) “generic” performativity: an aspect of economics (a theory, model, concept, procedure, data-set, etc.) is used by participants in economic processes, regulators, etc.
ii) “effective” performativity: the practical use of an aspect of economics has an effect on economic processes
iii) “Barnesian” performativity: practical use of an aspect of economics makes economic processes more like their depiction by economics
iv) counterperformativity: practical use of an aspect of economics makes economic processes less like their depiction by economics.
The paper will conclude that all four levels are to be found in aspects of the impact of option theory on derivatives markets. Amongst the topics to be discussed are the empirical history of option pricing, the volatility skew, and the role of portfolio insurance in the 1987 crash.