Social studies of finance is an interdisciplinary research area that combines perspectives from

anthropology Anthropology is the scientific study of humanity, concerned with human behavior, human biology, cultures, societies, and linguistics, in both the present and past, including past human species. Social anthropology studies patterns of be ...

economic sociology Economic sociology is the study of the social cause and effect of various economic phenomena. The field can be broadly divided into a classical period and a contemporary one, known as "new economic sociology". The classical period was concerned ...

science and technology studies Science and technology studies (STS) is an interdisciplinary field that examines the creation, development, and consequences of science and technology in their historical, cultural, and social contexts. History Like most interdisciplinary fie ...

, international political economy,

behavioral finance Behavioral economics studies the effects of psychological, cognitive, emotional, cultural and social factors on the decisions of individuals or institutions, such as how those decisions vary from those implied by classical economic theory. ...

, and cultural studies in the study of

financial markets A financial market is a market in which people trade financial securities and derivatives at low transaction costs. Some of the securities include stocks and bonds, raw materials and precious metals, which are known in the financial ma ...

and

financial instruments Financial instruments are monetary contracts between parties. They can be created, traded, modified and settled. They can be cash (currency), evidence of an ownership interest in an entity or a contractual right to receive or deliver in the form ...

. Work in social studies of finance emphasizes the social and cultural dimensions of financial activities, but focuses also on technical and economic dimensions such as pricing and trading.

History

Financial markets have been an object for sociological inquiry since, at least, Max Weber’s '' Die Börse''. The rise of quantitative financial theory in

financial economics Financial economics, also known as finance, is the branch of economics characterized by a "concentration on monetary activities", in which "money of one type or another is likely to appear on ''both sides'' of a trade". William F. Sharpe"Financia ...

from the 1950s onwards has led to an academic specialization on financial markets rather focused on economic modeling, and poorly attentive to sociological aspects. In the 1980s, a number of economic sociologists developed empirical investigation on the social structure and cultural characteristics of financial markets, especially in the US. Such pioneering researcher included contributions from Wayne E. Baker, Mitchel Y. Abolafia and Charles W. Smith, and was based on methods such as ethnographic observation or

social network analysis Social network analysis (SNA) is the process of investigating social structures through the use of networks and graph theory. It characterizes networked structures in terms of ''nodes'' (individual actors, people, or things within the network) ...

. In the 1990s, a number of researchers from the field of

such as Karin Knorr-Cetina and Donald A. MacKenzie started also developing empirical research in this area, with close attention to the role of expert knowledge and technology in financial activities.

Main topics

Research topics in social studies of finance include the cultural world and work habits of traders and other professionals in financial markets, the

globalization Globalization, or globalisation (English in the Commonwealth of Nations, Commonwealth English; American and British English spelling differences#-ise, -ize (-isation, -ization), see spelling differences), is the process of foreign relation ...

and

regulation Regulation is the management of complex systems according to a set of rules and trends. In systems theory, these types of rules exist in various fields of biology and society, but the term has slightly different meanings according to context. Fo ...

of financial services, the processes of

innovation Innovation is the practical implementation of ideas that result in the introduction of new goods or services or improvement in offering goods or services. ISO TC 279 in the standard ISO 56000:2020 defines innovation as "a new or changed entit ...

in the financial industry and the problems of

risk In simple terms, risk is the possibility of something bad happening. Risk involves uncertainty about the effects/implications of an activity with respect to something that humans value (such as health, well-being, wealth, property or the environm ...

and

uncertainty Uncertainty refers to epistemic situations involving imperfect or unknown information. It applies to predictions of future events, to physical measurements that are already made, or to the unknown. Uncertainty arises in partially observable ...

that characterize such processes.

Major references

* Adler, Patricia A. and Adler, Peter (eds) (1984) ''The Social Dynamics of Financial Markets'', Greenwich (Connecticut): The JAI Press. * Bernstein, Peter (1993) ''Capital Ideas: The Improbable Origins of Modern Wall Street'', New York: The Free Press. * Abolafia, Mitchel Y. (1997) ''Making Markets: Opportunism and Restraint on Wall Street'', Cambridge (Massachusetts): Harvard University Press. * Hertz, Ellen (1998) ''The Trading Crowd: An Ethnography of the Shanghai Stock Market'', Cambridge: Cambridge University Press. * Smith, Charles W. (1999) ''Success and Survival on Wall Street: Understanding the Mind of the Market'', Lanham (Maryland): Rowman & Littlefield. * Godechot, Olivier (2001) ''Les Traders: Essai de Sociologie des Marchés Financiers'', Paris: La Découverte. * Godechot, Olivier (2017) ''Wages, Bonuses and Appropriation of Profit in the Financial Industry'', London: Routledge. * Knorr Cetina, Karin and Preda, Alex (eds) (2004) ''The Sociology of Financial Markets'', Oxford: Oxford University Press. * MacKenzie, Donald (2006) ''An Engine, not a Camera: How Financial Models Shape Markets'', Cambridge (Massachusetts): The MIT Press.

External links

Social Studies of Finance web resource (University of Edinburgh)

Social Studies of Finance Association (France)

{{DEFAULTSORT:Social Studies Of Finance Interdisciplinary subfields of sociology Anthropology Science and technology studies Networks