The Distribution of Ignorance on Financial Markets

Daniel Souleles*

*Corresponding author for this work

Research output: Contribution to journalJournal articleResearchpeer-review

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Abstract

In the economists’ old conception of a market, perfection would arrive when all participants had complete knowledge. However, economists and psychologists have lately realized that ignorance and bias more accurately describe the state of
human knowledge even around those hallowed moments of transactional decision making. In these new academic stories, these models of irrationality and bias often take the form of basic cognitive features or evolutionary mal-adaptations. However, it’s just, as is often the case, that there is also a historically specific story about local culture to be told about ignorance. This paper will report back from field-work conducted with contemporary, computerized stock traders, develop a typology of the things they say they don’t know, and then suggest what this has to do with some of the more durable features and behaviours of contemporary financial markets.
Original languageEnglish
JournalEconomy and Society
Volume48
Issue number4
Pages (from-to)510-531
Number of pages22
ISSN0308-5147
DOIs
Publication statusPublished - Nov 2019

Bibliographical note

Published online: 03 December 2019

Keywords

  • Finance
  • Markets
  • Traders
  • Trading
  • Ignorance

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