9This is a pipe organ in largest hall of Moscow House of Music. Posted by Irina at 20:55Labels: instuments, theatre
10This is a pipe organ in largest hall of Moscow House of Music. [a declarative speech act]This is a pipe organ in largest hall of Moscow House of Music.Posted by Irina at 20:55Labels: instuments, theatre
13Performativity in economic sociology: Financial models are not representations. They are interventions that format, shape, perform markets. Their use brings new economic objects (markets) into being.Models are market making.
29The trading room is populated with devices for doubt The trading room is populated with devices for doubt. Traders do not simply use models and devices that perform the market. They also create and use devices for reflexivity.This reflexivity is not exterior to (or above) the structures of socially distributed calculation but is an integral part of it.
30Arbitrage is a (reflexively) skilled performance. And this reflexivity is not of the individual but is social and material.
31Epistemic challenges of using models in arbitrage
32Methodological constraint: a single morning at a single desk in an abritrage trading room.
33Calculation in merger arbitrage involves the dissonance between two sets of probability estimates:probability estimates derived at the desk using proprietary models, databases, and instrumentation.2) “implied probablity” – the aggregate probability estimates of the trader’s rivals
48The spread plot in merger arbitrage I feel I have not seen enough visualizations so far. So I’d like to start with the visualization that I am going to discuss today. This is a spread plot. I won’t explain what a spread plot is. But I will tell you what it does. This visualization allows users to see the invisible.Now let me give you the background of when I saw this, the research that I made and what I found.
49The spread plot is a representation of an economic object that does not have a price and is otherwise not observable, co-produced by the positioning of actors who use it to confront their interpretations and re-evaluate their positions.
50Decoding the spread plot time$TargetAcquirerHere, make the case of the difference between the spread plot and the price plot. It gives an advantage“Backing out” implied probability
51The spread plot instantiates the diversity of dispersed anonymous actors.
65The same devices for doubt can also be devices for overconfidence, leading to arbitrage disasters. WARNING
66The strength of reflexive modeling is based on the fact that it leverages the cognitive independence among dispersed and anonymous actors.
67The strength of reflexive modeling is based on the fact that it leverages the cognitive independence among dispersed and anonymous actors.But this same process suggests the possibilities of cognitive interdependence among the rival traders in the professional arbitrage community.
68Just as reflexive modeling can typically be a source of correction, so this same cognitive interdependence among traders can, in rare but dramatic instances, lead to the amplification of error.