Cognition in High-frequency Trading: The Costs of Consciousness and the Limits of Automation

Armin Beverungen, Ann-Christina Lange

Research output: Contribution to journalJournal articleResearchpeer-review

Abstract

Certain strands of contemporary media theory are concerned with the ways in which computational environments exploit the ‘missing half-second’ of human perception and thereby influence, control or exploit humans at an affective level. The ‘technological unconscious’ of our times is often understood to work at this affective level, and high-frequency trading is regularly provided as a primary illustrative example of the contagious dynamics it produces. We challenge and complicate this account of the relation between consciousness, affect and media technologies by drawing on the recent work of N. Katherine Hayles and by focusing in detail on the ways in which the ‘costs of consciousness’ are accounted for and negotiated in high-frequency trading. We suggest that traders actively develop modes of awareness accounting for the costs of consciousness, and that the necessary ‘stupidity’ of high-frequency trading algorithms as well as competition pose limits to the full automation of financial markets.
Certain strands of contemporary media theory are concerned with the ways in which computational environments exploit the ‘missing half-second’ of human perception and thereby influence, control or exploit humans at an affective level. The ‘technological unconscious’ of our times is often understood to work at this affective level, and high-frequency trading is regularly provided as a primary illustrative example of the contagious dynamics it produces. We challenge and complicate this account of the relation between consciousness, affect and media technologies by drawing on the recent work of N. Katherine Hayles and by focusing in detail on the ways in which the ‘costs of consciousness’ are accounted for and negotiated in high-frequency trading. We suggest that traders actively develop modes of awareness accounting for the costs of consciousness, and that the necessary ‘stupidity’ of high-frequency trading algorithms as well as competition pose limits to the full automation of financial markets.
LanguageEnglish
JournalTheory, Culture & Society
Volume35
Issue number6
Pages75-95
Number of pages21
ISSN0263-2764
DOIs
StatePublished - 2018

Keywords

  • Affect
  • Automation
  • Cognition
  • Financial markets
  • High-frequency trading

Cite this

Beverungen, Armin ; Lange, Ann-Christina. / Cognition in High-frequency Trading : The Costs of Consciousness and the Limits of Automation. In: Theory, Culture & Society. 2018 ; Vol. 35, No. 6. pp. 75-95
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Cognition in High-frequency Trading : The Costs of Consciousness and the Limits of Automation. / Beverungen, Armin; Lange, Ann-Christina.

In: Theory, Culture & Society, Vol. 35, No. 6, 2018, p. 75-95.

Research output: Contribution to journalJournal articleResearchpeer-review

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