Observing Finance as a Network of Observations: Comment on Esposito
Abstract
This essay contributes to observation theory by commenting on Esposito's paper, "Economic Circularities and Second-Order Observation: The Reality of Ratings." The key question of that paper is summarized as: How does one calculate in the Keynesian third degree (attempting to ascertain what the average opinion considers as the average opinion) under conditions of diabolical circularity (when uncertainty about the future is generated by attempts to predict the future)? Esposito answers that ratings provide a fixed point of reference not because they are accurate but because they are highly visible. The second half of the paper is itself a second‐order observation. It uses another viewpoint (that of observation theory) to reinterpret my earlier ethnographic and network analytic research on finance.Keywords:
Observation Theory, Attention Networks, Financial Models, Reflexivity, ValuationReferences
Beunza, D. & Stark, D. (2012). From Dissonance to Resonance: Cognitive Interdependence in Quantitative Finance. Economy and Society, 41(3), 383-417.
de Vaan, M., Vedres, B., & Stark, D. (2012). Game Changer: The Topology of Creativity in Video Game Development. Columbia University Center on Organizational Innovation, Working Paper Series.
Dupuy, J.P. (1989). Common Knowledge, Common Sense. Theory and Decision, 27(1-2), 37-62.
Esposito, E. (2009). The Certainty of Risk in the Markets of Uncertainty. En W. Hafner & H. Zimmermann (Eds.), Vinzenz Bronzin's Option Pricing Models: Exposition and Appraisal (pp. 359-372). Berlin/Heidelberg: Springer.
Esposito, E. (2011). The Future of Futures. The Time of Money in Financing and Society. Cheltenham: Elgar.
Esposito, E. (2013). The Structures of Uncertainty. Performativity and Unpredictability in Economic Operations. Economy and Society, 42(1), 102-129.
Esposito, E. (2014). Circularidades económicas y observación de segundo orden: La realidad de las calificaciones crediticias. Revista Mad, 30, 1-24. [En esta edición]
Fullbrook, E. (Ed.) (2001). Intersubjectivity in Economics: Agents and Structures. New York/London: Routledge.
Podolny, J. & Hill-Popper, M. (2004). Hedonic and Transcendent Conceptions of Value. Industrial and Corporate Change, 13(1): 91-116.
Prato, M. & Stark, D. (2013). Attention Networks: A Two-Mode Network View on Valuation. Columbia University Center on Organizational Innovation, Working Paper Series.
Stark, D. (2009). The Sense of Dissonance: Accounts of Worth in Economic Life. Princeton, NJ: Princeton University Press.
Vedres, B. & Stark, D. (2010). Structural Folds: Generative Disruption in Overlapping Groups. American Journal of Sociology, 115(4), 1150-1190.
Zuckerman, E. (2004). Structural Incoherence and Stock Market Activity. American Sociological Review, 69(3), 405-432.
de Vaan, M., Vedres, B., & Stark, D. (2012). Game Changer: The Topology of Creativity in Video Game Development. Columbia University Center on Organizational Innovation, Working Paper Series.
Dupuy, J.P. (1989). Common Knowledge, Common Sense. Theory and Decision, 27(1-2), 37-62.
Esposito, E. (2009). The Certainty of Risk in the Markets of Uncertainty. En W. Hafner & H. Zimmermann (Eds.), Vinzenz Bronzin's Option Pricing Models: Exposition and Appraisal (pp. 359-372). Berlin/Heidelberg: Springer.
Esposito, E. (2011). The Future of Futures. The Time of Money in Financing and Society. Cheltenham: Elgar.
Esposito, E. (2013). The Structures of Uncertainty. Performativity and Unpredictability in Economic Operations. Economy and Society, 42(1), 102-129.
Esposito, E. (2014). Circularidades económicas y observación de segundo orden: La realidad de las calificaciones crediticias. Revista Mad, 30, 1-24. [En esta edición]
Fullbrook, E. (Ed.) (2001). Intersubjectivity in Economics: Agents and Structures. New York/London: Routledge.
Podolny, J. & Hill-Popper, M. (2004). Hedonic and Transcendent Conceptions of Value. Industrial and Corporate Change, 13(1): 91-116.
Prato, M. & Stark, D. (2013). Attention Networks: A Two-Mode Network View on Valuation. Columbia University Center on Organizational Innovation, Working Paper Series.
Stark, D. (2009). The Sense of Dissonance: Accounts of Worth in Economic Life. Princeton, NJ: Princeton University Press.
Vedres, B. & Stark, D. (2010). Structural Folds: Generative Disruption in Overlapping Groups. American Journal of Sociology, 115(4), 1150-1190.
Zuckerman, E. (2004). Structural Incoherence and Stock Market Activity. American Sociological Review, 69(3), 405-432.
