olivier godechot

Sociology of financial markets


Financial markets have become a central institution of market societies but remain obscure. Courses on finance and financial markets are generally devoted to technical dimensions such as option pricing, asset allocation or valuation of assets. The ambition of the Sociology of financial markets class is to consider financial markets also as a human institution, with its history, its hierarchies, its various forms of rationality, its set of norms and beliefs, its social networks, its cognitive categories or its labor market. Analyzing the concrete day to day functioning of the financial markets is crucial not only for understanding this specific institution but also for understanding the logics that are diffusing beyond. Hence, financial markets are at the forefront of new forms of capitalism and constitute therefore an excellent observatory of their development.

The course will build bridges between concrete examples of financial markets, recent advances in the emerging field of sociology of financial markets and classical studies in economic sociology.

The course will be of great value for all students interested or attracted by financial markets, either as a possible option for a professional career, as a matter of political concern, or as an exciting topic of scientific study.

Students are invited to read one scientific article each week and to work more specifically on three articles on which they will write three memos that they will send to the professor. 1) One of the three memos will be two “powerpoint” slides which isolate the key points (either theoretical or empirical) of the demonstration of the article, 2) a second memo will be a one page report showing how the article relates to previous literature (and especially to other approaches presented during the class) and 3) a third memo will be a one page report devoted to criticize (negatively or positively) the article. The professor will organize a discussion based on students’ memos. All students are expected to participate to the general discussion.

Validation will be based on the three short reports (20% each) and on general participation.

Sciences Po, 28 rue Saint Guillaume, Room H202, Friday 14h45-16h45, from 7 September 2018 to 12 October 2018.



1. 7 September 2018. Introduction Historical approach of financial markets

Organization of the seminar

Material for lecture: 

Carruthers, Bruce G. 1999. City of capital: Politics and markets in the English financial revolution. Princeton University Press.

2. 14 September 2018. Financialization and the transformation of the firms

Debated article:

Quinn, Sarah. 2017. “‘The Miracles of Bookkeeping’: How Budget Politics Link Fiscal Policies and Financial Markets.” American Journal of Sociology 123 (1): 48-85.

Material for lecture:

Godechot, Olivier. 2016. “Financialization is marketization! A study on the respective impact of various dimensions of financialization on the increase in global inequality”, Sociological Science 3: 495-519.

Dobbin, Frank and Jiwook Jung. 2016. “Agency Theory as Prophecy: How Boards, Analysts, and Fund Managers Perform Their Roles”, Seattle University Law Review 39: 291–320.

In French: Godechot, Olivier. 2015. « Variétés de financiarisation et accroissement des inégalités », Revue Française de Socio-Economie 16: 51-72.

3. 21 September 2018. The financial labor market: exogenous and endogenous social hierarchies

Debated article:

Green, Clifton, Narasimhan Jegadeesh, and Yue Tang. 2009. “Gender and Job Performance: Evidence from Wall Street.” Financial Analysts Journal 65(6): 65-78.

Material for lecture:  

Roth, Louise-Marie. 2006. Selling Women Short. Gender Inequality on Wall Street, Princeton University Press

Godechot, Olivier. 2008. “"Hold-up" in finance: the conditions of possibility for high bonuses in the financial industry”, Revue française de sociologie, 49 Supplement Annual English Edition: 95-123.

In French: Godechot, Olivier. 2006. « Hold-up en finance. Les conditions de possibilité des bonus élevés dans l'industrie financière », Revue française de sociologie, 47 (2): 341-371.

4. 28 September 2018. Rationalities of the market. Performativity of theories and social backgrounds

Debated article:

MacKenzie, Donald. 2018. “Material signals: A historical sociology of high-frequency trading.” American Journal of Sociology, 2018, vol. 123, no 6, p. 1635-1683.

Material for lecture:  

MacKenzie, Donald and Yuval Millo. 2003. “Constructing a market, performing theory: the historical sociology of a financial derivatives exchange,” American journal of sociology 109 (1). 107-145.

In French: MacKenzie, Donald and Yuval Millo. 2003. « Construction d'un marché et performation théorique : sociologie historique d'une bourse de produits dérivés financiers », Réseaux, 21(122): p. 15-61.

Godechot, Olivier. 2016. “Back in the Bazaar. Taking Pierre Bourdieu to a Trading Room”, Journal of Cultural Economy 9(4): 410-429.

5. 5 October 2018. Cognitive and social embeddedness : Financial categories and social networks

Debated article:

Jung, Jiwook, and Taekjin Shin. 2018. “Learning Not to Diversify: The Transformation of Graduate Business Education and the Decline of Diversifying Acquisitions.” Administrative Science Quarterly: 0001839218768520.

Material for lecture:

Baker, Wayne. 1984. “The Social Structure of a National Securities Market”, American Journal of Sociology 89(4): 775-811.

In French: Baker, Wayne. 2005. “La structure sociale d’un marché à la criée”, Idees, n° 139, mars 2005, 56-69 & Idees, n° 140, juin 2005, 58-68.

Zuckerman, Ezra W. 1999. « The Categorical Imperative: Securities Analysts and the Illegitimacy Discount », American Journal of Sociology 104 (5): 1398‑1438.

 

6. 12 October 2018. Crisis and regulation

Debated article:

Angeletti, Thomas. 2017. “Finance on Trial: Rules and Justifications in the Libor Case.” European Journal of Sociology/Archives Européennes de Sociologie 58 (1): 113-141.

Material for lecture:

MacKenzie, Donald. 2011. “The Credit Crisis as a Problem in the Sociology of Knowledge”, American Journal of Sociology 116(6): 1778-1841.

Woll, Cornelia. 2014. The Power of Inaction. Bank Bailouts in Comparison, Duke University Press.



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