Activity

In a stimulating contribution to the literature on performativity in economic life, Elena Esposito points to the pervasiveness of what, drawing upon the social theory of Niklas Luhmann, she calls ‘second-order observation’. Translated into our terms, it is not simply that mathematical models in fin…

[...] our argument—our claim of counterperformativity—is that those assumptions made possible, via their gaming by market participants, the construction of securities that radically undermined them.

Options had been traded for centuries, but typically in only an informal, semi-organized way—in the interstices or on the peripheries of mainstream financial markets

For traders to use a model such as Black–Scholes is not like a medieval monarch making someone an outlaw by saying that they are an outlaw: no mathematical fiat.

Mathematical models are, after all, bricolage constructions inscribed with curdled utopias