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How to recognize opportunities: Heterarchical search in a Wall Street trading room


  • Daniel Beunza Ibáñez
  • David Stark


Our task in this paper is to analyze the organization of trading in the era of quantitative finance. To do so, we conduct an ethnography of arbitrage, the trading strategy that best exemplifies finance in the wake of the quantitative revolution. In contrast to value and momentum investing, we argue, arbitrage involves an art of association - the construction of equivalence (comparability) of properties across different assets. In place of essential or relationa l characteristics, the peculiar valuation that takes place in arbitrage is based on an operation that makes something the measure of something else - associating securities to each other. The process of recognizing opportunities and the practices of making novel associations are shaped by the specific socio-spatial and socio-technical configurations of the trading room. Calculation is distributed across persons and instruments as the trading room organizes interaction among diverse principles of valuation.

Suggested Citation

  • Daniel Beunza Ibáñez & David Stark, 2004. "How to recognize opportunities: Heterarchical search in a Wall Street trading room," Economics Working Papers 735, Department of Economics and Business, Universitat Pompeu Fabra, revised Sep 2005.
  • Handle: RePEc:upf:upfgen:735

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    References listed on IDEAS

    1. James G. March, 1991. "Exploration and Exploitation in Organizational Learning," Organization Science, INFORMS, vol. 2(1), pages 71-87, February.
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    Cited by:

    1. Carlo Massironi & Marco Guicciardi, 2011. "Investment decision making from a constructivist perspective," Qualitative Research in Financial Markets, Emerald Group Publishing, vol. 3(3), pages 158-176, October.
    2. Williams, James W., 2013. "Regulatory technologies, risky subjects, and financial boundaries: Governing ‘fraud’ in the financial markets," Accounting, Organizations and Society, Elsevier, vol. 38(6), pages 544-558.
    3. Preda, Alex, 2009. "Brief encounters: Calculation and the interaction order of anonymous electronic markets," Accounting, Organizations and Society, Elsevier, vol. 34(5), pages 675-693, July.
    4. Vollmer, Hendrik & Mennicken, Andrea & Preda, Alex, 2009. "Tracking the numbers: Across accounting and finance, organizations and markets," Accounting, Organizations and Society, Elsevier, vol. 34(5), pages 619-637, July.
    5. Barbara Czarniawska, 2011. "Anthropology and the organisation theory. Yesterday and today (Antropologia i teoria organizacji. Wczoraj i dzis)," Problemy Zarzadzania, University of Warsaw, Faculty of Management, vol. 9(32), pages 11-29.
    6. Knorr Cetina, Karin, 2007. "Economic sociology and the sociology of finance: Four distinctions, two developments, one field?," economic sociology_the european electronic newsletter, Max Planck Institute for the Study of Societies, vol. 8(3), pages 4-10.

    More about this item


    Arbitrage; trading; heterarchy;

    JEL classification:

    • M11 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Production Management
    • G19 - Financial Economics - - General Financial Markets - - - Other

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