Attentional Integration in Financial Markets

• In Event: 225 - Regular Session. Economic Sociology: Infrastructures for Financial Markets

Abstract

Financial markets, particularly those that are held to come closest to the economic market model, are generally seen to be populated by participants that are atomistic actors. This paper (and chapter of a larger work) finds that the assumption of individual action may be basically correct; actors in such markets are not structurally embedded in social relations of a kind relevant for participants’ transactions. It also finds that there is nonetheless a level of integration in these markets based on a regime of coercive attention. Thus while networks of relationships do not characterize such markets, attentional integration—enabled and mediated by computer screens and their synthetic (algorithmic) actors—connects participants on a cognitive level, leading to shared awareness, consciousness and narrations of events, but not to shared or identical response transactions. The paper contributes to the literature in three main ways. First, it problematizes the sociological claim that economic action is embedded in social (network) relationships by maintaining that these may be relevant to earlier and specific markets, but hold less in advanced, fully electronic markets. Second it proposes a different mechanism of integration that is based on participants’ coercive attention to the market on screen. Third the paper connects these claims to a particular mode of cognitive-emotional processing whose main advantage is speed and a relatively limitless capacity for taking into account information—but whose disadvantage may be moral subtractions that may explain the misunderstandings between Wall Street and Main Street.

Author

• Karin D. Knorr Cetina, University of Chicago