- List of Figures
- List of Tables
- Global Finance And Its Institutional Spaces
- Politics And Financial Markets
- Finance And Institutional Investors
- Business Groups And Financial Markets As Emergent Phenomena
- Central Banking And The Triumph Of Technical Rationality
- What is a financial market? Global markets as microinstitutional and post-traditional social forms
- Auctions And Finance
- Interactions And Decisions In Trading
- Traders And Market Morality
- The Material Sociology Of Arbitrage
- Seeing Through The Eyes Of Others: Dissonance Within And Across Trading Rooms
- Market Efficiency: A Sociological Perspective
- Financial Analysts
- Rating Agencies
- Accounting And Finance
- The International Monetary Regime And Domestic Political Economy: The Origin Of The Global Financial Crisis
- A Long Strange Trip: The State And Mortgage Securitization, 1968–2010
- Dead Pledges: Mortgaging Time And Space
- Financial Crises As Symbols And Rituals
- The Sociology Of Financial Fraud
- The Disunity Of Finance: Alternative Practices To Western Finance
- Islamic Banking And Finance: Alternative Or Façade?
- Geographies Of Finance: The State-Enterprise Clusters Of China
- The Financialization Of Art
- Historical Sociology Of Modern Finance
- Gender And Finance
- The Role Of Confidence In Finance
- Finance In Modern Economic Thought
- Financial Automation, Past, Present, And Future
Abstract and Keywords
This article explores the crucial role of diversity in the context of a financial organization. The first part observes that locational proximity of diverse tools and instrumentation within the trading room allows traders to understand the limitations of their valuation practices. The second part shows that externally induced dissonance allows traders to recognize the limits of their models. All models are built on the basis of the past, and as a consequence they are all liable to miss a future contingency. Using specialized quantitative techniques that extend the cognitive ecology beyond the confines of the trading room, traders are able to use the price mechanism to gain a sense of what their competitor's models are. They use this information to check whether their models are missing something.
Daniel Beunza is Lecturer in Management within the Employment Relations and Organisational Behaviour Group. His research in sociology explores the ways in which social relations and technology shape financial value. His award-winning study of a derivatives trading room within a Wall Street bank traces the roots of extraordinary returns to the use of space and internal organization. He has also studied securities analysts and the systemic risk posed by financial models. His current research is focused on responsible investment and the automation of financial exchanges.
David Stark is Arthur Lehman Professor of Sociology and International Affairs at Columbia University, where he directs the Center on Organizational Innovation. Stark's most recent book, The Sense of Dissonance: Accounts of Worth in Economic Life (2009) examines the perplexing situations in which organizations search for what is valuable. Papers from his various research projects are available at www.thesenseofdissonance.com.
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