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Market Shaping as an Answer to Ambiguities

Author

Listed:
  • Isabelle Huault

    (DRM - Dauphine Recherches en Management - Université Paris Dauphine-PSL - PSL - Université Paris Sciences et Lettres - CNRS - Centre National de la Recherche Scientifique)

  • Hélène Rainelli-Le Montagner

    (GREGOR - Groupe de Recherche en Gestion des Organisations - UP1 - Université Paris 1 Panthéon-Sorbonne - IAE Paris - Sorbonne Business School)

Abstract

Building on Smith (1989), we describe the social processes surrounding a new financial OTC derivatives market, the market for credit derivatives. We show that in contradiction with more traditional derivatives, credit derivatives generate ambiguities of a cognitive and political nature. By conducting an in-depth longitudinal qualitative study from 1996 to 2004, we document the efforts made by the promoters of the market to alleviate these ambiguities and show how the amount of resources needed results in the leadership of the most powerful. We thus provide a socially based explanation for the concentration and lack of transparency of the market. Our research exemplifies the contradictions between the rhetorical justification of financial innovations provided by financial theory and the empirical realities of a modern derivative market. It suggests that the actual structure of the market might best be understood by paying attention to the way different cognitive and political communities react to these contradictions.

Suggested Citation

  • Isabelle Huault & Hélène Rainelli-Le Montagner, 2009. "Market Shaping as an Answer to Ambiguities," Post-Print halshs-00340046, HAL.
    • Handle: RePEc:hal:journl:halshs-00340046
    Note: View the original document on HAL open archive server: https://shs.hal.science/halshs-00340046
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    Citations

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    Cited by:

    1. Fanny Reniou & Fabrice Larceneux & Béatrice Parguel & Florence Benoît-Moreau & Elisa Monnot, 2014. "Recherche et implications en marketing : l’intégration du développement durable," Post-Print hal-01330690, HAL.
    2. repec:dau:papers:123456789/15191 is not listed on IDEAS
    3. Carole Botton & Julien Fouquau, 2014. "L'Expertise De L'Evaluation : Une Construction Sociale," Post-Print hal-01899544, HAL.
    4. Cova, Bernard & Ivens, Björn Sven & Spencer, Robert, 2021. "The ins and outs of market shaping: Exclusion as a darkside?," Journal of Business Research, Elsevier, vol. 124(C), pages 483-493.
    5. Hélène Rainelli Weiss & Isabelle Huault, 2016. "Business as usual in Financial Markets? The creation of incommensurables as institutional maintenance work," Post-Print hal-01275254, HAL.
    6. Morales, Jérémy & Gendron, Yves & Guénin-Paracini, Henri, 2014. "State privatization and the unrelenting expansion of neoliberalism: The case of the Greek financial crisis," CRITICAL PERSPECTIVES ON ACCOUNTING, Elsevier, vol. 25(6), pages 423-445.
    7. Isabelle Huault & Hélène Rainelli-Weiss, 2011. "A Market for Weather Risk ? Conflicting Metrics, Attempts at Compromise and Limits to Commensuration," Post-Print halshs-00637068, HAL.
    8. Carruthers, Bruce G., 2013. "Diverging derivatives: Law, governance and modern financial markets," Journal of Comparative Economics, Elsevier, vol. 41(2), pages 386-400.
    9. Isabelle Huault & Hélène Rainelli-Weiss, 2013. "Is transparency a value on OTC markets? Using displacement to escape categorization," Working Papers halshs-00927090, HAL.
    10. Hélène Rainelli & Hélène Rainelli-Weiss, 2019. "Recherche en finance : quand la performativité invite à la réflexivité," Post-Print halshs-02025011, HAL.
    11. Okamoto, Noriaki, 2014. "Fair value accounting from a distributed cognition perspective," Accounting forum, Elsevier, vol. 38(3), pages 170-183.
    12. Elena Trubina, 2019. "The urban commodity futures of the Olympics: Examining the multiscalar processes of the Games," Environment and Planning A, , vol. 51(8), pages 1703-1719, November.

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