Scholars have described how rankings can be consequential for the shaping of the economy. The prevailing argument is that they wield influence through encouraging ‘mechanisms of reactivity’ amongst market actors. We ask the question as to whether there are additional agential aspects found within rankings that extend ‘social’ accounts. We suggest that ‘sociomateriality’ is also a significant aspect of a ranking’s influence. Through developing the notion of a ‘ranking device’, we examine how the ‘‘format and furniture’’ of a ranking can mediate and constitute a domain. Drawing on a detailed study of a prominent graphical performance measure from within the information technology (IT) arena, we provide evidence to show that IT markets can be as much a product of the affordances and constraints of ranking devices as any other (non-material) aspects of the ranking. The article integrates literature from Accounting research and Science and Technology Studies to contribute to our understanding of how material things and the economy mutually constitute one another. It also offers one of the first empirical accounts of the sociomaterial construction of a graphical ranking.

/pdf/give-me-a-two-by-two-matrix-and-i-will-create-the-market-3pcdans9vi.pdf

Give me a two-by-two matrix and I will create the market: Rankings, graphic visualisations and sociomateriality

In recent sociological studies of markets, especially financial markets, researchers have argued that economics is performative (MacKenzie, Callon et al.). By this they refer to the observation that theories such as the Black-Scholes formula do not simply describe reality, but contributed to the regulatory creation of financial markets in which the agents started to adopt behavioral patterns that correspond to the theory, also relying on artefacts that have been created by the originators of the theory. This notion of performativity fits also other recent uses of language theory in economics, such as the theory of organizational forms in organizational ecology (Carroll and Hannan) or John Searle’s theory of institutions. The paper builds on this, especially Searle’s approach, and explores the underlying cognitive operations. It is argued that performativity builds on the human capacity to generate new meanings from existing concepts. This is elaborated in the theory of conceptual blending that has been developed by Fauconnier and Turner. For example, blends are a typical phenomenon in the emergence of new business models, such as in the dotcom bubble. The theory of conceptual blending can be based on neuroscientific insights into the operations of the human brain, corresponding to Searle’s proposal to ground institutions in neurophysiological dispositions.

A Neurolinguistic Approach to Performativity in Economics

This paper contributes to the understanding of the role of crowds in the financial market by examining the historical origins and theoretical underpinnings of contrarian investment philosophy. Developed in non-scientific, practice-oriented ‘how to’ handbooks in 1920s and 1930s America, contrarian investment advice was aimed at so-called small investors rather than well-established market practitioners. Emerging out of late-nineteenth- and early-twentieth-century debates about public participation in the stock market, the contrarians expanded on a widely held (amongst financial writers) scepticism about the investment and speculation skills (or lack thereof) of the masses and adopted ideas from the theoretical discipline of crowd psychology, whereby they positioned the mass (i.e. the crowd) in opposition to the successful investor. I argue that despite its idiosyncrasies, the contrarians’ conception of the market based on crowd psychology points to a fundamental fragility of market participants, wh...

/pdf/contrarian-investment-philosophy-in-the-american-stock-14mpdtpj0z.pdf

Contrarian investment philosophy in the American stock market: on investment advice and the crowd conundrum

Being a part of social studies of finance, i.e. a perspective that, in its narrow sense,
investigates the role of science and technology in financial markets, the thesis suggests
that one can understand science in a wider sense, as an expert knowledge domain. The
social studies of finance, then, can be broadened out to encompass the different ways in
which expert knowledge shapes financial practices. Legal expertise is another
instantiation of expert knowledge in the sense that both (science and law) are different
forms of power; therefore this research aims at answering the question how finance is
shaped by legal expert knowledge.
The study employs the method of ‘opening the black box’ of regulation, and thus it
argues that technicalities of regulation, which embody legal expertise, are crucial for the
construction of financial markets. The thesis demonstrates how ‘just’ a concise
amendment to Article 1062 of the Russian Civil Code has had significant ramifications
for the interbank USD/RUB cash-settled forward market, and explores the controversies
involved in and details of the law making process.
The amendment was made in 2007 and changed the legal status of non-deliverable
forwards, which had been classified by Russian courts as gambling transactions under
Russian law in 1998-1999. Based on the evidence obtained from the study of the legal
developments that resulted in the amendment, the thesis shows that the politics of the
law-making process, as well as shaping the outcome, can in equal measure be disruptive
and result in a delay in legal changes that market participants felt were much-needed.
After almost a decade of painstaking negotiations, the amendment stated that cashsettled
derivatives are legally enforceable under the Russian law. It rendered cash-settled
forwards legally secure, hence encouraged cross-border transactions and enhanced the
market’s liquidity; it is also made possible the introduction of netting as a risk
management tool in the market. The contested, long-delayed amendment is thus an
example of a pervasive process: the constitutive role of law (including esoteric law, little
noticed outside of specialist spheres) in shaping markets.

Making markets, making laws: non-deliverable currency forwards and the Amendment to Article 1062 of the Russian Civil Code

Rankings are a powerful feature of economic life, such that scholars foreground their constitutive aspects. Some go as far as to describe rankings as ‘engines’ that intervene in the economy. They are in seen in particular to encourage ‘mechanisms of reactivity’ amongst actors. This raises the question as to whether there are additional agential features of rankings beyond these ‘social’ accounts. We call for a greater focus on socio-material agency, in particular on the devices and equipment that surround, contain and make-up rankings. We discuss an influential visual ranking called the ‘Magic Quadrant’, which is a two-by-two matrix that ranks information technology (IT) vendors. We give attention to one particular feature of this ranking, the device of ‘the dot’, which has a bearing on the ranking’s constitutive capacity. We describe as ‘dot-ology’ the various aspects that go into the production and communication of this ranking as well as the implications that stem from it. In terms of the former, this is how the Magic Quadrant offers various affordances and constraints to those who produce it. As for the latter, we show how it has encouraged the development of a new visual and cyclical culture within the IT domain. Given there have been few, if any, detailed studies of the internal practices of ranking organizations this paper potentially contributes to a better understanding of the socio-material constitution of a prominent ranking. Our study is based on ethnographic observations and interviews conducted over a period of several years on one of the most highly influential of ranking organizations in the IT arena.

Give Me a Two-by-Two Matrix and I Will Create the Market: The Socio-Materiality of Rankings

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