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Cited by 1,464Economic Theory and InstitutionsManagement and Organizational StudiesContemporary Sociological Theory and Practice

Constructing a Market, Performing Theory: The Historical Sociology of a Financial Derivatives Exchange

MacKenzie, Donald, Millo, Yuval·2003·American Journal of Sociology
DOI 10.1086/374404
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Abstract

This analysis of the history of the Chicago Board Options Exchange explores the performativity of economics, a theme in economic sociology recently developed by Callon. Economics was crucial to the creation of financial derivatives exchanges: it helped remedy the drastic loss of legitimacy suffered by derivatives in the first half of the 20th century. Option pricing theory—a “crown jewel” of neoclassical economics—succeeded empirically not because it discovered preexisting price patterns but because markets changed in ways that made its assumptions more accurate and because the theory was used in arbitrage. The performativity of economics, however, has limits, and an emphasis on it needs to be combined with classic themes in economic sociology, such as Granovetterian embedding and the way in which exchanges can be cultures and moral communities in which collective action problems can be solved.

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Crossref · 10.1086/374404

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  • By introducing new business models, firms develop new markets.

    “By introducing new business models, firms develop new markets (Callon and Muniesa 2005;MacKenzie and Millo 2003;Pollock and Williams 2009;Inversini and Masiero 2014;Storbacka and Nenonen 2011).”

    From Smart tourism: foundations and developments (2015) · cites this paper as MacKenzie and Millo 2003

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Authors
MacKenzie, D., & Millo, Y.
Affiliations
  • University of Edinburgh (GB)
  • London School of Economics and Political Science (GB)
ORCID
Venue
American Journal of Sociology
Publisher
University of Chicago Press
Published
2003-07
Volume
109
Issue
1
Pages
107-145
ISSN
  • 0002-9602 (ISSN-L)
  • 1537-5390
DOI
10.1086/374404
OpenAlex
W3121178381
Cited by
1,464
References
4
Citations by year
2026: 53 · 2025: 56 · 2024: 87 · 2023: 38 · 2022: 44 · 2021: 68 · 2020: 79 · 2019: 114 · 2018: 95 · 2017: 65 · 2016: 97 · 2015: 59 · 2014: 66 · 2013: 80 · 2012: 75
FWCI
73.51
Type
journal article
Language
en
Open access
closed
Locations
  • American Journal of Sociology (publishedVersion)
  • London School of Economics and Political Science Research Online (London School of Economics and Political Science) (acceptedVersion)
Topics
  • Social Sciences › Economics, Econometrics and Finance › Economics and Econometrics › Economic Theory and Institutions
  • Social Sciences › Business, Management and Accounting › Organizational Behavior and Human Resource Management › Management and Organizational Studies
  • Social Sciences › Sociology and Political Science › Contemporary Sociological Theory and Practice
Keywords
Chicago Board Options Exchange, financial derivatives, options market, economic sociology, option pricing theory, arbitrage, embeddedness, collective action, financial markets, history of financial markets

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