What if We Had Been in Charge? The Sociologist as Builder of Rational Institutions
In this postscript, I argue that a sociological approach to regulating securities markets requires a clear stance on the relationship between price and value, one that combines (a) the contrarian thesis that there are objective criteria by which one can assess value more accurately than the current...
| Main Author: | |
|---|---|
| Other Authors: | |
| Format: | Article |
| Language: | en_US |
| Published: |
Emerald Group Publishing Limited
2012
|
| Online Access: | http://hdl.handle.net/1721.1/71595 https://orcid.org/0000-0002-6271-0708 |
| _version_ | 1811086692493295616 |
|---|---|
| author | Zuckerman Sivan, Ezra W. |
| author2 | Sloan School of Management |
| author_facet | Sloan School of Management Zuckerman Sivan, Ezra W. |
| author_sort | Zuckerman Sivan, Ezra W. |
| collection | MIT |
| description | In this postscript, I argue that a sociological approach to regulating securities markets requires a clear stance on the relationship between price and value, one that combines (a) the contrarian thesis that there are objective criteria by which one can assess value more accurately than the current market price; (b) the constructionist thesis that prices are governed by commonly known beliefs that can vary substantially from the objective reality they purport to reflect; and (c) the realist thesis that the market comprises powerful mechanisms (arbitrage and learning) that, when working properly, close the gap between the contrarian's private belief and common knowledge, thus producing reasonable prices. This integrated “rationalist” perspective understands the real estate bubble as the product of institutional conditions that fostered pluralistic ignorance regarding the extent of bearish sentiment. Regulatory prescriptions focus on support for transparent pricing and a relative evenhandedness in the institutional support provided for bulls/optimists and bears/pessimists. |
| first_indexed | 2024-09-23T13:30:41Z |
| format | Article |
| id | mit-1721.1/71595 |
| institution | Massachusetts Institute of Technology |
| language | en_US |
| last_indexed | 2024-09-23T13:30:41Z |
| publishDate | 2012 |
| publisher | Emerald Group Publishing Limited |
| record_format | dspace |
| spelling | mit-1721.1/715952022-09-28T14:36:17Z What if We Had Been in Charge? The Sociologist as Builder of Rational Institutions Zuckerman Sivan, Ezra W. Sloan School of Management Zuckerman Sivan, Ezra W. Zuckerman Sivan, Ezra W. In this postscript, I argue that a sociological approach to regulating securities markets requires a clear stance on the relationship between price and value, one that combines (a) the contrarian thesis that there are objective criteria by which one can assess value more accurately than the current market price; (b) the constructionist thesis that prices are governed by commonly known beliefs that can vary substantially from the objective reality they purport to reflect; and (c) the realist thesis that the market comprises powerful mechanisms (arbitrage and learning) that, when working properly, close the gap between the contrarian's private belief and common knowledge, thus producing reasonable prices. This integrated “rationalist” perspective understands the real estate bubble as the product of institutional conditions that fostered pluralistic ignorance regarding the extent of bearish sentiment. Regulatory prescriptions focus on support for transparent pricing and a relative evenhandedness in the institutional support provided for bulls/optimists and bears/pessimists. 2012-07-12T16:29:58Z 2012-07-12T16:29:58Z 2010 Article http://purl.org/eprint/type/BookItem 978-0-85724-208-2 978-0-85724-207-5 0733-558X http://hdl.handle.net/1721.1/71595 Zuckerman, Ezra W. (2010), What if we had been in charge? The sociologist as builder of rational institutions, in Michael Lounsbury, Paul M. Hirsch (ed.) Markets on Trial: The Economic Sociology of the U.S. Financial Crisis: Part B (Research in the Sociology of Organizations, Volume 30), Emerald Group Publishing Limited, pp.359-378. https://orcid.org/0000-0002-6271-0708 en_US http://dx.doi.org/10.1108/S0733-558X(2010)000030B016 Research in the Sociology of Organizations Creative Commons Attribution-Noncommercial-Share Alike 3.0 http://creativecommons.org/licenses/by-nc-sa/3.0/ application/pdf Emerald Group Publishing Limited Zuckerman via Alex Caracuzzo |
| spellingShingle | Zuckerman Sivan, Ezra W. What if We Had Been in Charge? The Sociologist as Builder of Rational Institutions |
| title | What if We Had Been in Charge? The Sociologist as Builder of Rational Institutions |
| title_full | What if We Had Been in Charge? The Sociologist as Builder of Rational Institutions |
| title_fullStr | What if We Had Been in Charge? The Sociologist as Builder of Rational Institutions |
| title_full_unstemmed | What if We Had Been in Charge? The Sociologist as Builder of Rational Institutions |
| title_short | What if We Had Been in Charge? The Sociologist as Builder of Rational Institutions |
| title_sort | what if we had been in charge the sociologist as builder of rational institutions |
| url | http://hdl.handle.net/1721.1/71595 https://orcid.org/0000-0002-6271-0708 |
| work_keys_str_mv | AT zuckermansivanezraw whatifwehadbeeninchargethesociologistasbuilderofrationalinstitutions |