In economic sociology, networks of relationships are seen as playing a fundamental role with respect to economic transactions, while interactions support such networks. Consequently, interactions ...appear as subordinated to the aim of conducting transactions, and as having an instrumental character. This comment argues that, if transactions are to be made possible, interactions among participants have to be conducted and understood as non-instrumental and autonomous.
Noise Preda, Alex
2017, 2017-03-01, Letnik:
57734
eBook
We often think of finance as a glamorous world, a place where investment bankers amass huge profits in gleaming downtown skyscrapers. There's another side to finance, though—the millions of amateurs ...who log on to their computers every day to make their own trades. The shocking truth, however, is that less than 2% of these amateur traders make a consistent profit. Why, then, do they do it?In Noise, Alex Preda explores the world of the people who trade even when by all measures they would be better off not trading. Based on firsthand observations, interviews with traders and brokers, and on international direct trading experience, Preda's fascinating ethnography investigates how ordinary people take up financial trading, how they form communities of their own behind their computer screens, and how electronic finance encourages them to trade more and more frequently. Along the way, Preda finds the answer to the paradox of amateur trading—the traders aren't so much seeking monetary rewards in the financial markets, rather the trading itself helps them to fulfill their own personal goals and aspirations.
Recent sociological conceptualizations of competition emphasize its discursive or institutional aspects, such as rankings. Although macro- and meso-sociological takes on competition are more or less ...well established, micro-sociological approaches are less so. What does it mean to be in competition from the perspective of everyday social relationships and interactions? A possible answer is provided by the concept of rivalry. In this paper, I examine the evolution of the concept of rivalry and its development in the sociological tradition in the early to mid-twentieth century, especially in the work of Georg Simmel, Leopold von Wiese, Karl Mannheim, but also, later, Erving Goffman. I argue that a micro-sociological focus on rivalrous social relationships and interactions is able to address at least some of the issues concerning a micro-sociology of competition. Grounded in an examination of this tradition, I discuss how rivalry relates to sociological notions such as social knowledge, action, worth, and evaluation. I distinguish two intersecting logics of competition, namely, the logic of action and the logic of observation. I argue that a typology of rivalries cutting across various domains of social life can be worked out according to this intersection. A micro-sociology of rivalries can make a genuine contribution to the sociological investigation of competition.
•A scopic environment places traders under a constant spotlight of scrutiny.•Constant scrutiny increases an individuals degree of self-consciousness.•Traders under observation aim to avoid the ...display of losses.•A scopic regime erodes the disposition effect.
A scopic regime constitutes a state of permanent reciprocal observation and scrutiny among participants. We investigate whether this environment reduces the disposition effect among retail traders as they are constantly scrutinized by others, thus driving them to realize and limit their losses. We use two anonymous data sets, the first from a popular social trading platform (STP) governed by a scopic regime, and the second from a traditional foreign exchange broker. STPs allow participants to interact and copy each other’s trades using mirror trading, thus implicitly creating two groups; trade leaders who execute unique trades to build their performance record, and copiers who allocate funds to be managed by the former. We find ample evidence of a weaker disposition effect among trade leaders in the scopic environment compared to traders in a traditional setting. Our findings suggest that a state of constant observation and scrutiny erodes the disposition effect as individuals become more self-conscious of their actions and limit their losses to avoid tarnishing their public trading record.
We contribute to the literature on herding in the cryptocurrency market by using a unique data set of trader transactions. Using popular metrics, we find significant evidence of herding, which is ...primarily driven by individuals mimicking their own past trades, given the sporadic nature of information as well as the ambiguity and anonymity inherent in this market. Herding is higher during bearish periods as traders react more similarly to negative news. We find evidence of intentional herding due to informational cascades in less liquid cryptocurrencies, where significant price movements may be interpreted as valuable information. Traders with larger accounts tend to mimic their own past trades. Mature traders trade similarly due to their lower tolerance for risk and experimentation. We find herding differentials among traders that arise due to the environment governing the local financial system in which they are located. Moreover, persistence in herding is lower compared to what has been reported in other markets due to the higher degree of ambiguity of cryptocurrencies and the individuals trading them. Finally, market factors such as volatility, have a significant effect on herding. Our results shed light on how trader characteristics and market factors impact an individual’s propensity to herd.
•Herding among cryptocurrency traders is lower compared to equity traders.•Herding arises due to informational cascades in less liquid cryptocurrencies.•Large accounts exhibit coordinated trading.•Mature traders trade similarly due to their lower tolerance for risk.•Market factors, such as volatility, have a significant impact on herding.
Abstract
The role of online discussions in rallying investors has been highlighted by the GameStop frenzy of 2021. We know little, however, about the effect of online discussions on investor ...survivorship. Previous studies have emphasized the role of communication with respect to market entry, but not with respect to market survival. Survivorship studies, in turn, have largely focused on the role of financial factors in the investors’ decision to quit trading, but have not investigated so far how social interactions and communication impact the decision to quit or stay. Using a dataset covering 1.1 million observations for 4,731 traders over 18 months, we examine the role of online discussions in traders’ decisions to stay in the market. We find that traders who actively engage in them tend to be 16 per cent to 30 per cent less likely to quit trading. We identify a positive Granger-causal relationship between online discussions and the probability of survival. Our results are robust to alternative measures of communication and different sets of control variables. Based on this evidence, we draw attention to the necessity of studying the nexus between finance and social media as an important component of platform capitalism.
Recent discussions of calculative agency in financial markets (a variety of socio-technical agency) have stressed that technology constitutes markets through standardization. This raises the question ...of additional agential features of financial technologies, which may go beyond, supplement and embed standardization and calculability. I propose here the concept of 'generator' as a way of capturing such features of socio-technical agency in financial markets. I use this concept for examining the stock ticker, the first custom-tailored technology adopted by financial markets. I show that the ticker generated temporal structures and modes of visualizing these structures, together with representational languages, interpretive tools and boundaries associated with access to financial data.
Financial markets have often been seen by economists as efficient mechanisms that fulfill vital functions within economies. But do financial markets really operate in such a straightforward manner? ...The Sociology of Financial Markets approaches financial markets from a sociological perspective. It seeks to provide an adequate sociological coneptualization of financial markets, and examines who the actors within them are, how they operate, within which networks, and how these networks are structured. Patterns of trading, trading room coordination, and global interaction are studied to help us better understand how markets work and the types of reasoning behind these trends. Financial markets also have a structural impact on the governance of social and economic institutions. Until now, sociologists have examined issues of governance mostly with respect to the legal framework of financial transactions. Contributions in this book highlight the ways in which financial markets shape the inner working and structure of corporations and their governance. Finally the book seeks to investigate the symbolic aspects of financial markets. Financial markets affect not only economic and social structures but also societal cultural images and frameworks of meaning. Barbara Czarniawska demonstrates how representations of gender relationships are a case in point. Arguing that financial markets are not simply neutral with respect to questions of gender but enhance certain images and interpretations of men and women. Addressing many important topics from a sociological perspective for the first time, this book will be key reading for academics, researchers, and advanced students of financial markets in Business, Management, Economics, Finance, and Sociology.
PDF
