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Economic embeddedness and materiality in a financial market setting
Philip Roscoe
The School of Management
University of St Andrews
[email protected]
01334 461973
Submission to The Sociological Review
October 2010
Revised August 2011, December 2011, January 2012
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Acknowledgements
An early version of this paper was presented at the 2008 Annual Meeting of the American
Sociological Association. The author thanks the reviewers, discussant Daniel Beunza, and the
audience for their constructive suggestions. Rene Algesheimer, Shiona Chillas and Paul
Hibbert read versions of this paper and provided invaluable advice. The author also thanks
three anonymous reviewers and the editor of the Sociological Review. Errors and omissions
remain the responsibility of the author alone.
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Abstract
The notion of embeddedness (Granovetter 1985) neglects of the material dimension of
economic relations. This paper contributes to the literature of market devices (Callon, et al.,
2007) with an exploration of the material dimensions of economic embeddedness in the case
of the everyday market activities of a group of non-professional investors in the UK. It
examines the attributes of a materially embedded market through the categories of socioeconomic embeddedness specified by Uzzi (1997) and draws attention to the superficial and
rhetorical nature of the face-to-face social relations encountered in this market. The paper
seeks to invigorate the notion of embeddedness by expanding the mechanisms through which
socio-economic relations are understood to arise. The paper offers support to the literature of
market devices’ assertion that a concept of materially embedded economic relations can
accommodate politics, culture, and regulation, and that it offers a nuanced perspective on
agency and identity in the marketplace.
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Introduction
In the three decades since Mark Granovetter’s (1985) paper gave a name to the networkbased analysis of economic relations, the concept of embeddedness has become pivotal to our
understanding of market operation. It claims instead that social relationships play a
significant role in the behaviour of market agents, that ‘the structure of our social
relationships, and not simply a transaction specific maximisation rule, determines our choices
of economic trading partners and how we interact with them’ (DiMaggio and Louch,
1998:620). Granovetter’s (1985) article drew together existing work in the area, and set out a
map for future research. Since then, the concept of embedded markets has been explored and
developed in reference to, for example, labour markets (Granovetter, 1973; Granovetter,
1983), production markets (White, 1981) and entrepreneurial firms (Uzzi, 1997), consumer
markets (DiMaggio and Louch, 1998), and financial markets (Sassen, 2005). The notion of
embeddedness became the conceptual core of the ‘New Economic Sociology’ (NES)
appearing in numerous general expositions, book chapters and discussion articles. The
concept has had a great impact in areas of the social sciences other than economic sociology;
in organisational studies, for example, the social network perspective has led to a huge and
varied literature, as reviewed by Kilduff and Brass (2010). Disciplinary bridges have been
built and researchers have been encouraged by institutional theory (Powell and diMaggio,
1991), for example, to take a broader perspective, and to consider regulation, politics and
culture. Sociology has been left with accounts of social (Uzzi, 1996), political (Fligstein,
1996) and cultural (Zelizer, 1994) embeddedness that sit one atop the other – to borrow
Çalışkan’s (2007:242) metaphor – like a Venn diagram, with the object of study somehow
located in central field; ‘embeddedness’ itself has become an ‘increasingly popular but
confusingly polyvalent concept’ (Jessop, 2001).
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Fligstein (1996; 2001) complained that networks are sparse social structures, unable to
convey the power dynamics and politics of markets. More recently, scholars working in the
social studies of finance have developed a critique over the unwillingness of social network
analysis to tackle the material devices (Muniesa, et al., 2007) through which economic
relations are enacted. For these writers, ‘social network analysis should not be limited to
studying ties among persons’ (Beunza & Stark, 2004). The present paper takes up this theme
and explores how a narrow notion of embeddedness – the understanding that economic
transactions are enmeshed in social relationships – may be reinvigorated by a focus on the
materiality of everyday market practices. It will argue that market participants still seek the
benefits of a Granovetterian embeddedness – improved information, trust, and shared labour
(Uzzi,1997) – yet do so through social spaces and relationships that are mediated and
constituted by market devices. In doing so, it contributes to the literature of material market
studies (Callon, 1998; MacKenzie, 2006; Callon, et al., 2007; MacKenzie, et al., 2007). It
offers a further development of this literature through a systematic consideration of the
characteristics of material embeddedness in the light of the detailed framework of socioeconomic embeddedness provided by Uzzi (1997).
The paper will proceed as follows. I will first of all summarise the key points of the literature
on socio-economic embeddedness and the social network perspective. The paper will then
introduce the sociological studies of financial markets, with particular reference to studies of
market devices and the material nature of market settings. The study methodology is then
presented. I continue with an analysis of the material embeddedness of the market activities
of non-professional investors, focusing on screens, screen-based interaction, and division of
labour. The paper then considers the role of the social in investors’ activities, and concludes
with a discussion of the theoretical implications of this study.
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The social network perspective on economic relations
Kilduff and Brass (2010) characterise embeddedness as one of four core ideas that underpin
the social networks perspective. More fully, these are social relations; embeddedness, that
actors show a preference for transacting with network members; structural patterning; and the
utility of network connections, epitomised by the theory of ‘structural holes’ (Burt, 2005).
Network analysis has been successfully deployed at the inter-organizational level (Powell, et
al., 2005) and from structural perspectives (Pizarro, 2007). Embeddedness is an important
determinant in inefficient markets where information is scarce (Burt, 1992), but also in
perfect markets (Kilduff and Brass, 2010). Embeddedness, then, is set up in opposition to the
atomised, maximising rule of market transaction; ‘organisational networks operate on a logic
of exchange which differs from the logic of markets... ongoing social ties shape actors’
expectations and opportunities in ways that differ from the economic logic of market
behaviour’ (Uzzi, 1996:676).
Financial markets, perhaps because of their fluid nature as a second-order, exchange role
markets (Aspers, 2005) have already proven a fertile field for studies of the ongoing
performance of economic relationships. The social embeddedness of financial markets was
investigated (even before Granovetter’s paper) by Baker (1984), who examined social
interactions in trading pits, a subject returned to later by Zaloom (2006). Both documented
the clear relationship between social interactions and market prices. MacKenzie’s (2003)
study of hedge fund managers showed that a Granovettarian sociology could do much to
explain the process of portfolio imitation that contributed to the downfall of Long Term
Capital Management in 1998. Abolafia (1998) examined the culturally embedded
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characteristics of trading rooms and Sassen (2005) the global geo-politics of electronic
markets. Research has also considered the ways in which social infrastructures such as the
layout of large trading rooms (Beunza and Stark, 2004) or organisational infrastructures in
smaller hedge funds (Beunza, et al., 2006) influence the calculative strategies employed by
market agents.
In this paper I seek to systematically analyse the constitution of economic relations in a
financial market setting. To do so, I will make use of the taxonomy of embeddedness and its
effects provided by Uzzi (1997). Uzzi’s (1996; 1997) work is particularly useful in its
intention to advance a systematic account of the functioning of social ties that can move
beyond the programmatic and conceptually vague (1996:674) statement that social relations
may facilitate and/or derail economic exchange. Successful in this effort, Uzzi’s papers are
considered, alongside those of Granovetter (1973; 1983), as pivotal references for the
literature of embeddedness (Kilduff and Brass, 2010). Uzzi lists five preconditions, or social
structural antecedents, of embeddedness: voluntary contributions, reciprocity, face-to-face
interaction, the division of labour, an absence of the option to exit the marketplace. He also
identifies three components of an embedded relationship – trust, high-quality information,
and problem-solving arrangements – and various firm level effects. His taxonomy is
reproduced in table 1 below.
----------------------------------insert table 1 about here
---------------------------------This paper sets out to explore and develop the analytic categories established by Uzzi (1997)
through an actor-network (Latour, 2007) inspired approach, focusing on the embeddedness of
agents within heterogeneous (Law, 1999) agencements (Callon and Muniesa, 2005):
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constellations of human agents, theoretically inscribed devices and performative scripts
organised by routines and proceduresi. As noted above, the social network perspective
remains mute on the role of devices in market function, surprisingly so, for ‘can a market
exist without a set of market devices?’ (Muniesa, et al., 2007:2). I will highlight the extent to
which material relations perform market operation, and will draw into question the value of
face to face social relationships in stabilising market relations. First of all, however, it is
necessary to review the existing literature on market devices and set out the theoretical
debates behind these studies.
Material markets: devices and agencements
The role of the material in the constitution of economic markets has been bought to
prominence by the theoretical innovations of sociologists who, following Callon (1998), have
sought to emphasise the embeddedness of economic markets in constellations of material
devices, termed agencements. Callon (1998) suggests that the economy is embedded in
economics through theoretically informed inscriptions of material devices. Callon’s
innovation provides a means of theorising embeddedness that can incorporate political
relationships (Callon and Muniesa, 2005), cultural mores (Çalışkan, 2007) and regulatory
frameworks (Millo and MacKenzie, 2009); it conceptualises markets as stabilised by their
material and linguistic arrangements (Çalışkan and Callon, 2009; Çalışkan and Callon, 2010),
which in turn frame the decisions of markets agents. For researchers using the notion of
agencement, the market (or more broadly the ‘social’) is not a thing-in-itself, but the product
of an organizing and stabilizing of ‘heterogeneous’ (Law, 1999), material agents (Latour,
2007), a process Callon (1998) describes as ‘performative’. As Muniesa et al. note (2007:10),
this ‘pragmatic turn’ in economic sociology, focused on the market device embedded in
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calculative agencements, is ‘of great help in tackling materiality and in pointing to the
distributed nature of economic actions’.
Such an approach has yielded rich empirical work on market formation. In a broader context,
the importance of market devices has been demonstrated, for example, in mass retail
(Cochoy, 2007; Kjelberg, 2007), the implementation of fishing quotas, educational practices
and disciplinary regimes (Hoskin and Macve, 1994; Walker, 2010); the eclectic nature of this
material highlights the broad reach of ‘device’, most usefully a thing that ‘holds together’
such that it may have objectified and singular characteristics (Callon and Muniesa, 2005). In
the case of financial markets, the pivotal role of devices has been explored with reference to
calculators (Beunza and Muniesa, 2005; Hardie and MacKenzie, 2007), and the equations
that they embody (MacKenzie, 2003), trading rooms (Beunza and Stark, 2004; Zaloom,
2006), and screens, whether seen as the ‘pipes’ and ‘scopes’ of the market (Knorr Cetina,
2005), or as a craftsman’s bench on which the trader works as tool builder and sense maker
(Beunza and Stark, 2004). Analysis of devices can be scaled up to speak to the coordination
of whole markets (MacKenzie and Millo, 2003) and global firms (Millo and MacKenzie,
2009). Even prices, the most fundamental of all market outcomes, are performed by social
and material interactions, be that in a small hedge fund in London (Beunza, et al., 2006;
Hardie and MacKenzie, 2007), or a cotton exchange in Turkey (Çalışkan, 2007).
Sociological research, then, has begun to understand financial markets as embedded in the
socio-material performances of a heterogeneous array of market actors. The present paper
offers a further contribution to this literature by examining the everyday economic
embeddedness of one particular group of market actors: non-professional investors in the UK.
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Studying non-professional investors
Non-professional investors – individuals who are neither salaried employees of investment
firms, nor self-employed traders within organised investment markets – represent an
interesting area for empirical research in financial markets. Their activities have received
limited attention within mainstream finance research, with the exception of de Bondt’s (1998;
2005) disparaging surveys; among sociological researchers in finance, these investors have
received increasing attention with empirical work focusing, for example, on their decision
making strategies (Roscoe and Howorth, 2009), their participation in investment clubs
(Harrington, 2007), and their solitary interactions with the screen (Preda, 2009).
The intention of this project was to develop a holistic and contextualised understanding of the
activities of non-professional investors. I therefore set out to generate a rich body of data with
a view to presenting a thick description (Lincoln and Guba, 1985) of investing activities. The
research did not strive to produce a comprehensive account of activity as applicable to all
non-professional investors – an impossible task across such a fragmented marketplace – but
to generate a plausible or trustworthy (Ahrens and Chapman, 2006) account of one group that
could speak to well specified research questions. The study strives to present a valid account
of investor activities (Dyer and Wilkins, 1991), with potential problems of observer bias and
data access limitations addressed through the use of comprehensive description, multiple
methods and observations (Lincoln and Guba, 1985; Ahrens and Chapman, 2006).
The data comprise a case study of a particular group of investors, a group defined in part by
the chosen approach to data collection. Non-professional investors as a class are difficult to
access due to the isolated and often invisible nature of their occupation, and qualitative
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studies have tended to recruit volunteers through social gatherings: public meetings (Mayall,
2006) and investment clubs (Harrington, 2007), for example. This project took a similar
approach. I visited investment seminars and shows and used a short questionnaire to generate
background data and as a means of facilitating interview requests. Interviews were still hard
to come by, as indeed were questionnaire responses: three full days and two evenings of
attendance at these events (with time equally divided between observation and questionnaire
administration) yielded 95 questionnaires, generating 21 potential interviewees. Of these 13
individuals were finally interviewed, others failing to return calls, agreeing to speak at a time
when they proved unavailable, and leaving false or out of date contact details. As a corrective
to the contingent nature of the recruiting process, advertisements were posted on bulletin
boards and interviewees were asked to recommend colleagues who were willing to be
interviewed (a snowballing method). The remaining six interviewees were contacted through
these methods. A total of 24 interviews were conducted with 19 non-professional investors.
Interviews lasted between 25 and 50 minutes. Due to the geographical dispersion of
investors, most interviews were conducted by telephone; with the exception of four
interviews; two conducted in person, and a two further two which took place at evening
seminars, and were shorter and recorded by notes. Five investors were interviewed twice,
with a gap of six months between interviews, in order to investigate emerging topics in
further detail. Interview transcripts also gave me access to spaces such as investment clubs
that remained, despite my efforts, unavailable. Table 2 gives details of the interviewees.
--------------------------------insert table 2 here
-----------------------------Interview data were corroborated (Ahrens and Chapman, 2006) by the use of other methods:
observation, the analysis secondary material, and questionnaires which provided limited
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quantitative data (age, trading frequency, portfolio size) and qualitative data (e.g. media
consumed) useful at a descriptive level across a large group of investorsii. Observation took
place at the investor events, and was recorded using field notes. Relevant brochures and
demonstration material were collected at these events. Online investor resources were visited
and other investment media were used where appropriate. Thus final data comprised
interview transcripts, field notes, responses to the survey questionnaire, media articles, online
materials, and marketing materials for investor products. Data were analysed from an early
stage in the research process through comparison and re-comparison (Boeije, 2002). Themes
were identified within interviews and across interviews; thematically clustered matrices
(Miles and Huberman, 1994) were built to incorporate themes from literature as well as
emerging themes in the data. Data saturation was considered to have been reached when
analysis of interview and observation data contributed no new themes (Eisenhardt, 1991;
Boeije, 2002); saturation was also evidenced by an increasing homogeneity of accounts, with
investors detailing similar methods and articulating similar discourses of investing, for
example with stock phrases of investment activity occurring frequently in interviews. The
accounts offered by investors recruited through advertisement on referral did not present any
additional or striking themes.
Materially embedded investing
The paper will now consider the role of devices in constituting the market agencements of
investors. I will argue that investors are embedded in material relations where devices are not
simply instruments in a post-social appresentation (Knorr Cetina and Bruegger, 2002) of
others, but are active parts of a socio-technical arrangement. While the existence of devices
points, in theory, to the myriad possibilities of market arrangement (Callon and Muniesa,
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2005), in practice, devices closely specify the options available to investors and the outcomes
of their calculations. Thus it is the material networks of investors that, echoing DiMaggio and
Louch (1998:620) ‘determine our choices of economic trading partners and how we interact
with them’. This section will consider first of all screens, or more properly, the sites, texts
and networks that the screens and access. It will show that these media give rise to, and
subvert, two core categories of embeddedness offered by Uzzi (1997): face-to-face
relationships, division of labour. These categories will be considered in turn.
The screens
Screens were an important means for the non-professional investors studied to see and
interact with the market, accessing via the open navigation of an internet browser a wide and
varied range of sites. It is, however, impossible to force the screens of the non-professionals
into the background; these screens were overtly performative in the sense that they presented
the market in a particular manner, constituting the user not only as a market participant in a
general sense, but as a particular kind of investor (for example a long-term investor, or a
chartist) of value as a customer of the service provider. Interviewees were consumers of
investment services, and the products and sites that they used were of a similar nature to the
other sites that might be associated with everyday browsing and consumption activities:
bright, dynamic, and enormously varied, but at the same time carefully arranged with tightly
specified functions and boundaries. Each space offered a different presentation of the market,
different tools and different interpretations of market data, tailored to particular target
audiences. Where the professionals use the screens as a workbench on which they can shape
and enact the market (Beunza and Stark, 2004), non-professionals encounter pre-existent
market performances, organised and curated by others, through which they may interact with
the market in particular kind of way.
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Some websites achieve more prominence and centrality than others, and establish themselves
as general gateways for non-professional investors. In doing so, they become simulacra of the
market, spaces in which an investor could pursue the whole of his or her investing activity;
they provide information, tools, context and meaning for the activity of investors. A
discussion of market devices can benefit greatly from providing an analysis of the spaces in
which they operate (Cochoy, 2007), and so it is useful to provide an example. One such
example, ADVFNiii, is an ‘investor portal’ and provides vast resources for non-professionals
wanting to access the market. It offers investors access to real-time price data from the
London Stock Exchange and Ofex (now Plus Markets), a news feed showing regulatory news
and press releases, extensive fundamental data on companies, charting facilities, data on
foreign exchange and futures prices, extensive bulletin boards and training. The only
conspicuous absence from its offering is trading facilities, although these are offered through
links to partner brokers. To give an idea of the popularity of this suite of online spaces, at the
time of writing the site has 300,000 registered users, while 125,000 individual monthly users
generate 30 million page impressions per monthiv. The overall impression of the website is of
extreme busyness, a visual assault on the senses that mimics the hurly-burly of the financial
markets; the homepage alone (figure i) presents a wall of brightly coloured, restless
information, including: index graphs, news and price feeds, the day’s biggest risers and
fallers, charting tools, as well as numerous advertisementsv.
---------------------------Insert figure i about here
----------------------------
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At the heart of ADVFN are the message boards: electronic fora where investors can interact,
swapping ideas and opinions. The boards are busy, boasting 50,000 comments a monthvi;
ADVFN’s bulletin boards are but one example of a pervasive feature of non-professional
investing. Bulletin boards are attached to portals, to stockbroker sites, represent specialist
users and special interest groups. For operators they represent an opportunity to stabilise the
community of users around a suite of revenue generating services, recalling Jessop’s (2001)
definition of embeddedness: the re-entangling of economic relations with social as a crucial
precondition for the stability of marketsvii. Many bulletin boards are designed and organised
in a way that fragments the universe of non-professional investors into groups defined by
interest. There is, therefore, a tension between specialised sites and those general portals
(such as ADFN) that seek to capture and represent the entire market. For users, however,
these boards have a different function: providing a site for the social interaction of market
participants.
Screen-based interactions
Studies of professional investors have viewed the activities of traders within the broader
context of the organization (Beunza and Stark, 2004), or the market as an institution
(MacKenzie and Millo, 2003). It is in these sites beyond the screens that politics of valuation,
for example, are enacted (Beunza and Garud, 2007). Using Uzzi’s (1997) taxonomy, these
organizational sites may be understood as the loci of face-to-face interaction, reciprocity, and
voluntary contribution, leading to trust and enhanced informationviii. Non-professionals lack
such infrastructures; for those interviewed in this study, it appeared that the bulletin boards
served as a substitute. Bulletin boards have different purposes for different investors. For
some, this may only be a means of combating what Nigel describes as their ‘isolated
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occupation’, providing a social and institutional structure for solitary investors. For others,
the message boards provide a space where they can develop an online performance as a
market professional, emphasising investment dexterity or specialist expertise. More active
participants in these spaces, such as Nigel, got to know the online personae and were able to
distinguish good quality posters from bad, making no distinction between the post-social
presentation of a known other, and the entirely virtual phenomenon of the bulletin board
colleague:
Interviewer: ‘Do you trust some posters more than others?’
Nigel: ‘Yeah! [with emphasis] Absolutely!’ (Nigel: interview)
Karl used discussion boards as sources of investment strategies to test out in the market.
Robert has often invested on the basis of a bulletin board recommendation, and others, such
as Simon and Nigel, used the boards as a source of first ideas for investment research. But
electronic interactions remain first and foremost performances, in which true actions and
intentions are not necessarily disclosed. For this reason, a minority of interviewees argued
that the boards are of little value. Stewart said that he had ‘never found any comment of any
use on a bulletin board’, while Mickey agreed: ‘I never use bulletin boards. There is generally
such a load of crap on them whenever I’ve looked at them that I never bother.’ (Stewart and
Mickey: interviews). These investors regarded bulletin boards as contentious sites, of dubious
value, characterized by individuals with particular agendas acting anonymously, for example
to ‘ramp’ stock by creating a false appearance of demand for the shares. But despite their
reservations investors found it impossible to ignore these sites. Even Stewart and Mickey
have enough experience of bulletin boards to pass judgment on their quality. Peter summed
up the non-professional’s troubled relationship with the message boards: ‘I get drawn into the
bulletin boards, I do read them, I find them spectacularly dangerous.’ (Peter: interview)
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The division of labour: devices and assemblages
Traditional notions of socio-economic embeddedness understand network relationships as
existing between human agents: Uzzi (1997) lists face-to-face interaction as one of his five
social structural antecedents of embeddedness. The bulletin boards illustrate the way in which
distinctions between social and virtual are blurred as actors interact with virtual others in an
electronic simulacrum of the market; actors on the bulletin boards were aware that electronic
Others may be other than post-social mediations of trusted colleagues. The tidy categories of
socio-economic embeddedness may be further eroded by examining a secondary
phenomenon, the expert division of labour; another of Uzzi’s (1997) preconditions for the
development of embeddedness, as economic agents seek to achieve efficiencies by
specialisation. In a materially embedded market expert labour will be divided not only
between human agents, but also between humans and devices, instruments inscribed with a
variety of performative scripts. This is the very nature of an agencement: a distribution of
agency and calculative activity. Moreover, in an investment service consumption market,
these scripts will be calibrated for the configuration and retention of customers. Thus, online
investment spaces are complemented by suites of tools offered by investment service firms,
and these tools may actively shape the market productions that investors undertake. There is a
dialectic relationship between tools and the sites that host them, with commentary and
opinion on the message boards serving educate investors in the use of tools, or to provide the
particular world view or understanding that a device needs order to function. The complex
tools of technical analysts, for example, require not only a certain proficiency in their use, but
also depend on a given understanding of market function and organisation (Roscoe and
Howorth, 2009). Both may be easily learnt through the commentary offered on bulletin
boards. Where investment service firms offer tools for use, they will form part of the process
of customer differentiation achieved by the appropriate processing of market data: an
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execution-only broker targeting small-scale investors might offer recommendations for major
shares, weekly or monthly tips, and some form of stock selection tool. Again, it is useful to
offer an example. The ‘Share Picker’, provided by one such execution only broker, produces
a short-list of suitable companies on the basis of an investor’s selection of key metrics; the
broker hopes for a clientele of long-term clients with stable portfolios, and the metrics offered
are staples of security analysis, such as dividend yield, P/E ratio, and earnings growth. Users
of the device share labour with an expert in the shape of a screening tool, configured along
the lines of the broker’s requirements and integrated with the tips, articles, and advice
provided by the broker’s own staff.
-----------------------insert figure ii about here
Figure ii. The Share Picker offered by The Share Centre [accessed 9 July 2007]. Categories
such as dividend yield and p/e ratio can be ranked in order of importance to generate a shortlist of stocks.
-------------------------
Uzzi’s (1996; 1997) analysis shows that economic agents spend much time in establishing
themselves in social relationships in order to improve costs, information, and access to
resources. An analytic perspective that stresses the material nature of embeddedness accepts
the role of virtual others, calculative devices, and others actors represented by scripts such as
newspaper articles. In this agencement, agency slips to even imaginary others: like Zaloom’s
(2003) ‘spoofer’, the spectre of the professionals’ ‘muddy footprints’ haunted one
interviewees’ account:
‘The financial markets are actually set up to benefit the minority at the expense of the
majority, ...they are manipulated quite cynically …you can actually see their [the big
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players’] muddy footprints all over the market as they trade, it’s really uncanny.’
(Chris: interview)
Here we see another kind of performance, the solitary production of the market in the
investors’ own homes as individuals dramatically create relationships with real and imagined
others (Preda, 2009). Remote, never met, even imagined others become counterparties in
long-term relationships across the financial marketplace: the materiality of screen-based
performance, analytic technology and performative text forms the basis of the embeddedness
of these market agents. From these solitary performances interviewees slowly built their own
representations of the market: Anne literally cut and pasted newsprint and magazine copy
into her scrapbook, while Robert built up his computerised database with facts and figures on
firms of interest.
At the same time, investors must interact with providers of financial services in order, for
example, to gain advice and execute trades. Providers of advice and services to nonprofessionals position themselves explicitly against the monolithic financial sector. The
investment writer Tom Bulford – who Simon follows closely – promotes himself thus:
‘I love banking big stock market gains – especially if it’s on the blindside of other
investors. Seven years ago I quit my high-flying career in the Square Mile to join a
newsletter called...’ix
Operators of these services are frequently or owners of small firms who can develop social
ties with their clients. But these relationships too can be dramatised interactions with others
experienced in the form of text or screen. Simon referred to ‘my friend Mr Bulford’ (Simon:
interview) while Albert says of the designer of his analytic software:
‘He is a wonderful man, he’s so generous and kind and clever. Amazing man, I could
follow him to the ends of the Earth.’(Albert: interview)
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Unlike their professional peers, non-professionals must build their own infrastructures using
online services, tools, and meeting places. Perhaps this may account for the sustained use of
message boards, despite frequently expressed misgivings over the quality and intention of
performances made there. It appears that, in their role as the online public places of the
community, the boards were not representations of what is going on in the market. Rather, the
performances they host are the market, at least as experienced by certain groups of investors,
of whom these interviewees were one. The commercial segmentation of investing activities
locks investors into particular sites, each with its own set of language, devices and investing
folk wisdom, resulting in a proliferation of markets that reflects Law and Urry’s account of
the social sciences, where ‘different research practices might [make] multiple worlds, and
that such worlds might be equally valid, equally true, but simply unlike one another’ (Law
and Urry, 2004:397). For interviewees it appeared that the message boards performed a
similar function to the open outcry pits of pre-digital markets, as a site of performance of
prices, where social interactions, non-verbal cues, and factors such as the overall noise level
could be taken as indicators of the state of the market (Zaloom, 2006; Çalışkan, 2007). Nonprofessional investors can follow market activity by watching the interactions on the
discussion boards. In place of a straightforward social embeddedness we find these investors
building relationships of trust and shared expertise with heterogeneous and often material
actors. Reciprocity and exchange emerge, even in the partnership of the advisory device and
investment service customer. Recognising that markets are embedded in material artefacts as
well as social relationships – understanding, in other words, the agencements of these nonprofessionals – allows us to make sense of these relations.
20
The role of the social: spectacle and self-identity
It would, however, be untrue to suppose that the non-professionals’ market is constituted
solely by solitary interactions with devices and imagined others, for investors took part in a
market that also enjoyed a rich social dimension. Interviewees visited training seminars and
exhibitions, where they met expert traders, company directors, and promoters of investing
and trading materials. They also formed investment clubs and other social groupings to
discuss investment ideas, strategies and techniques, combining the business of investment
with a pleasurable social excursion. Yet, as the nature of these venues implies, the social
interactions of non-professionals at shows, seminars and clubs does not much resemble the
long term, needs-driven socio-economic embeddedness envisaged by Granovetter (1985) and
Uzzi (1996). Instead, as the present section makes clear, the social slides into spectacle
(Debord, 1983), becoming a performance of the most overt kind. I will argue that the
concrete, physical presentations of markets fail to deliver the benefits of embedded economic
relations as set out by Uzzi’s (1997) categories. Instead, market performances appear to be
closely linked to the presentation of identity and more appropriately theorized as a
consumption activity (Harrington, 2007).
Investment shows and market spectacle
Large-scale investment shows epitomise the tension between society and spectacle in the
activities of the non-professionals interviewed. These shows appear to be a particularly
important aspect of the physical production of the markets for non-professional investors,
giving them a rare opportunity to interact with an investing world on a larger scale. The show
is part bazaar, part spectacle, and part learning experience; investors attend to browse, to
learn, and to be part of a public performance of the financial market. It is worth analyzing one
show in more detail to illustrate this pointx. The very layout of the show underwrote its
21
intention as a performance. The venue, a hall in London’s Olympia, offered space for
approximately 45 stalls as well as two substantial auditoriums. It was configured in a large
‘U’ shape, with auditoriums on the left hand side (from the entrance) and the majority of
stands on the right. These stands were occupied by exhibitors, investment services companies
ranging from the stock-broking arms of major financial institutions to small independent
financial publishers and software providers. Stands were brightly coloured, illuminated, and
in many cases furnished with armchairs and sofas, where attractive, young sales-people
extracted signatures on account opening forms. In addition to the auditoriums, there was a
further open seminar area beyond the stalls, seating approximately 50 and equipped with
projector, screen and PA system. Two of the larger stands also had their own mini-seminar
areas, seating roughly 30, and similarly equipped. These were located at the corners of the
‘U’. A delegate, standing anywhere in the halls, was within aural range of one seminar at any
given time. Those stands lacking their own seminar space were likely to have a large-screen
television displaying the latest financial news. The rolling programme of seminars, backed by
Bloomberg TV or CNBC, produced a wall-to-wall carpeting of market talk. The combination
of name badges suspended on trader-style neck fobs (distributed at the entrance), the bustle,
the barrage of computer screens displaying charts and market data, the ever-present noise
from the seminars, the steady ebbs and flows of preoccupied people, all served to lend the
show an air of authenticity, something of the flavour of the genuine trading room.
Despite the exhibitors’ emphasis on sales, it was clear that investors had attended the
exhibition primarily to learn, and considered exhibitor’s stands to be of secondary importance
to the exhibition’s seminars. The seminar programme was substantial, and conference
sessions and seminars dominated proceedings at the show. They represented a clear priority
for the attendees; on numerous occasions the attendees were unwilling to complete a
22
questionnaire because of an imminent seminar, or checked their watch before agreeing to do
so. Where it was possible to observe seminars in progress I saw that they were full to capacity
and often had a standing audience. There was, of course, a commercial aspect to many of
these seminars. The representatives of investment service firms extolled the virtues of
particular practices or techniques, and manufacturers of software explained how one aspect of
market function (easily detectable through their proprietary algorithm) might be harnessed to
deliver endless profits. On the other hand there was a sense, manifested particularly in the
panel debates that took place each lunchtime, that the nature of the market itself was still
open to discussion; a keynote panel that explored the merits of technical analysis as against
‘fundamental’ investing sought an understanding of market operation, seemingly considering
that operation to be malleable, one that could be contested and settled through a democratic
process of analysis and debate. In these spaces investors did more than produce a pantomime
of the market. Instead they took ownership of it, seeking to define and articulate it through
their performances. As is the case with professional investors, the market becomes seen as an
epistemic project (Knorr Cetina and Bruegger, 2000), a common object to be worked on and
defined by the community of investors.
The investor show, therefore, becomes an arena for debates over the politics of valuation and
market organisation. Yet given the size and market power of professional investors as against
the non-professionals, it is hard to see such politics being enacted. The debate becomes
instead the venue for another spectacle, the rhetorical resistance to professional finance.
Moreover, while the theory of embeddedness stresses the improved information available
through social relationships (Granovetter, 1973; Uzzi, 1996), investors still had reservations
about the quality of information gathered at these commercially hosted investment events. As
Karl explained,
23
‘I like to go because you pick up some good things from fellow investors… in this
one I didn’t really pick up anything personally anyway, but sometimes although it
seems like I didn’t pick up anything now, in the future something might arise.’ (Karl:
interview)
As do the bulletin boards, investor events offer individuals an opportunity to take part in
public performances of the market, eruptions of a virtual, second-order market into the real
world; like the bulletin boards, exhibitions are noisy, overwhelming, and often of dubious
value in terms of information, and yet un-missable.
Investment clubs and self-identity
Another category of social event is the investment club. Investment clubs allow participants
to meet and talk, and have been identified as a means for individual investors to access the
capital markets (Harrington, 2007). Harrington’s characterisation of non-professional
investment as a form of consumption activity recognises the link between investment activity
and identity:
More often, it was a matter of taste, or what Bourdieu would call ‘distinction,’ as in
the case of the group that refused to buy stock in La-Z-Boy – a manufacturer of
reclining chairs and sofas associated with middle-brow American décor – because,
despite the firm’s excellent economic prospects, it came with class-linked
connotations that the investors thought would reflect poorly on them (Harrington,
2007:22).
Investment clubs allow investors to display expertise and serious intent, exemplified by
Mickey’s dismissal of less serious clubs is operating on a ‘Here’s my fifty quid, now let’s go
24
and have a pint’ model. Yet is the stated intention of these sites is social, and sociality. Albert
describes formation of one such club:
‘A gentleman called [ ] who lived in Essex, had retired, had a lump sum, had been in
business and clever with money, took his lump sum and started doing a pension
scheme and was absolutely appalled how badly he was doing on the stock market,
when he thought that he was good at it because he’d been doing figures all his life. So
he wrote an open letter in the Investors Chronicle, and said: I’m retired, I’m doing
this and it’s a very lonely business and I’m very, very dismayed at how badly I’m
doing. If there are any fellow travellers out there who’d like to meet for lunch once a
month and commiserate and chat over the stock market, please write.’ (Albert:
interview)
Investment clubs fill the need for an institutional and social framing of investment activity.
Club members do develop genuine social relationships, and do divide labour, culminating in
joint problem-solving and learning. But most of all, investors talk. At Mickey’s club,
members talk:
‘About shares, individual shares, how individuals arrive at particular shares, what
trading they’ve done during the month…[or we] discuss particular sectors....one of the
guys has just done a presentation on the transport industry, he actually works in it as a
logistics adviser.’ (Mickey: interview)
George attended a club where individuals run a dummy portfolio throughout the year based
on their own investment preferences, such as high dividend yield, the ‘Zulu principle’, or
George’s favourite, small-cap technology stocks. At Albert’s club members chatted over
anything remotely related to investing, ‘what Tate & Lyle are doing, what Morgan Sindell
has been doing, as builders what about the building sector...about politics and Gordon Brown
25
and taxation and the world, the Green ecology system’ (Albert: interview); while in other
venues they explore sophisticated strategies of charting and options trading. Social sites are
spaces where investors can enhance their skills and abilities, learning new things and
absorbing new information. More than this, they are a place for performance, enabling
individuals to present themselves as investors, as experts, and as participants in a market that
remains largely invisible to others.
In summary, social spaces formed an important part of the activities of these non-professional
investors. Yet their purpose was as much that of performance, spectacle and entertainment, as
it was a constituting aspect of economic relations. It seemed as if the social spaces presented
an escape from the mundane and solitary activities of the individual investor (Preda, 2009), as
much as they contribute to the quality of investment information and skills. An analysis of
this one sector of the market must be most cautious in asserting the purely instrumental and
economic value of social relationships.
Discussion
This paper has set out to consider the nature of embedded economic relations among one
group of non-professional investors in the UK. It has explored their everyday interactions
seen, for a group that trades relatively infrequently (see table 2), largely in terms of gathering
information and forging networks. I have argued that the category of material, largely
neglected in social network research (c.f. Kilduff and Brass, 2010), is vital in understanding
the embedded economic relationships of these investors. I have made use of the concept of
agencement (Callon and Muniesa, 2005), popular in the science and technology studies
inspired literature of financial markets, to describe the complex, agency-filled networks of
26
device, theory, and place that surround these investors. I contribute to the literature’s
understanding of agencement by theorising these network forms in terms of the analytic
categories of embeddedness proposed by Uzzi (1997). In short, I demonstrate that material
agencements may give rise to the components and effects associated with a social analysis of
network embeddedness.
Uzzi (1997) lists five structural antecedents of embeddedness: voluntary contributions,
reciprocity, face-to-face interaction, expert division of labour, and the impossibility of exit.
Together these lead to embedded relationships epitomised by trust, better information, and
joint problem-solving arrangements. Table 3 sets out these categories and considers some of
the investors’ everyday actions which correspond to these categories. Voluntary
contributions, for example, are manifested by shared research, often posted online, and online
comments. Once it is recognised that artefacts such as scrapbooks and databases enjoy a
status equivalent to the human agents in interviewees’ production of financial markets,
solitary activities such as the compilation of investing databases can be included here.
Reciprocity is present in a generalised form in public postings and the debates of investment
shows, and more specifically in the bilateral exchanges of investment clubs, for example.
Face-to-face interaction is found in numerous categories: mediated through screen and print,
through interaction with others known electronically and in the real world; through solitary
performances and imagined others, whether the amiable Mr Bulford or the muddy footprints
of the city traders. Labour is divided among individuals – career experts offering
presentations in investment clubs – and between commentators and analytic programs.
Though not discussed explicitly in my analysis, the absence of an exit option is evident, with
investors making long-term commitment to earn a living or manage a pension (Albert,
Mickey, Chris, terry: interviews). The table also details the components of an embedded
27
relationship developed: i) trust, which is generated through bilateral social relationships,
bilateral mediated relationships or materially embedded relationships (i.e. with text or
inscribed devices) ; ii) fine grained information, manifested by the detailed production of
markets in shared spaces; iii) and joint problem-solving arrangements in the form of
investment clubs, investment search networks, online debate and criticism, and the
development and sharing of more powerful kinds of investment decision making.
-----------------------------Insert table 3 here
-------------------------------
On a broader level, the insight of Uzzi’s (1997) study – that economic pressure and the search
for improved performance among participants in a confined market arena leads to the
development of mutually helpful social relationships – can be seen to be true of the nonprofessional investors interviewed. Trust, for example, a cornerstone of social embeddedness
theorising since Granovetter’s papers (1973; 1985) is manifested across agencements (in
devices, algorithms, and scripts) to a far greater degree than it appears in social relationships.
At times, the human agent is invoked as a synecdoche for the device: Albert claims to trust
his software program because he trusts its original designer, now the chief executive of a
small firm selling financial analytics. Pundits such as Jim Slater, and ‘Mr Bulford’ though
not known in person, are rich in symbolic capital (Bordieu, 2005) which becomes the basis
for use of their books and trust of their advice.
Fligstein (1996; 2001) noted the sparse nature of social networks. The literature of market
devices also finds networks sparse; while it sets out from the shared assumption that markets
28
are inherently social, researchers have repeatedly argued for the inclusion of tools,
instruments and material settings within the analytical framework of social embeddedness.
The focus of these investigations has been the distributed nature of calculation (Callon &
Muniesa, 2005): ‘What counts? Tools count. Instrumentation must be brought into the
accounts of economic sociologists’ (Beunza & Stark 2004:370). For Beunza and Stark,
calculation is distributed across persons and instruments, not simply embedded in social
relations. Yet at the same time, studies of professional investors have incorporated
conservative accounts of the role of the social. MacKenzie (2004) discusses the
Granovetterian sociology of hedge fund managers; Beunza and Stark (2004:378) see the
trading room as a ‘space of sociability’, and Hardie and Mackenzie (2007) present an account
of socially-structured mechanisms of a hedge fund. Calculation stretches out of instruments,
across desks, and into social relationships. Muniesa (2008)argues that research should pay
attention to the way in which the technical features of devices shaped action in particular
ways; yet the device in question, the telephone, serves primarily to allow identification of
counterpart and the construction of interpersonal networks of trust and recognition at a
distance. As one trader says, ‘It’s good to see who does what. It’s important to be able to call
the person’ (Muniesa 2008: 9).
The present paper also sets out from the position that markets are social, and that social
relationships have much to offer market participants (Uzzi, 1997). It asks how market
participants construct sociability in the absence of institutional structures, and often in the
absence of genuine social interaction, whether direct or technologically mediated. Investing,
for many, was a lonely occupation (Nigel: interview). The non-professional investors
examined in this paper exhibited the characteristics of a Granovetterian sociology: they
sought to stabilise economic relationships, to guarantee market information, and to build
29
relationships of trust. Yet the vehicles for doing so were the devices and spaces made
available to them by the Internet and by investment media. Existing studies of market devices
offers evidence of traders and analysts trusting the calculative power of their tools and
instruments (Beunza & Muniesa, 2005); in my analysis of non-professionals this trust is
developed further as devices take on the role of the social structures that surround
professional traders. In an ironic turn, the analysis has shown that face-to-face relationships
may even offer less to investors in terms of fine-grained information, shared labour, and trust;
it appears that is the value of investment shows and clubs is as primarily in their spectacle
and enjoyment value.
I offer a brief comparison with the contributions of three analysts who have pursued other
relationship-based perspectives: Baker (1984), Abolafia (1998) and Zuckerman (2004). These
contributors privilege, respectively, physical proximity, cultural norms and scripts, and
classificatory regimes. Baker’s (1984) pioneering study drew attention to the power of social
structure in facilitating market operation. Bounded rationality and opportunism, major
preoccupations for traders in the pits, could be most effectively overcome by micro-networks
offering trust and social policing; these persisted whatever the size of the crowd. Baker
determines an optimum crowd size for stable pricing, and shows in one sense that the
physical matters. Yet his analysis neglects the sheer physicality of the trading pits as
documented by Zaloom (2003:263): ‘The tone of voice, the body language of the trader, who
may be steadily and confidently holding his hands forward in engagement with the market or
yelling his bids, spittle flying and eyes wide, in desperation to get out of the trade, are crucial
inflections that traders draw on to form market judgments.’ While Baker’s account omits this
aspect of market physicality and its impact on traders’ calculation, Zaloom has persuasively
argued that a richer account of market cognition is offered by its inclusion. Similarly, the
30
relative abstraction of his approach neglects the impact of trading tools and mechanisms:
trading cards and stamps are mentioned in his methodology, yet do not feature in the analysis
offered. Zaloom’s (2006) account of the evolution of Chicago’s trading rooms makes clear
the importance of acoustics, pillars and telephones in constructing a functioning market.
Abolafia’s (1998) study of ‘markets as cultures’ understands markets as held together by
regulative and normative rules and behavioural scripts. These govern the pursuit of selfinterest and stabilise everyday trading: customers’ orders must always be executed first, and
all transactions go ‘on the tape’ as soon as possible (p.71). Market efficiency and the
competitive atomisation of participants are guaranteed by a ‘caricature of the spirit of
capitalism’ (p.72). As with Baker’s study, material structures and artefacts lurk in the
background: the understanding among market-makers that all trade should be brought to a
particular spot, that orders must be placed ‘in the book’ and transactions ‘on the tape’.
Abolafia’s traders use ‘toolkits’ (p. 72 and 77) and develop routinized procedures of sorting
(p.75) , yet these comprise linguistic and behavioural scripts, rather than actual devices. For
Abolafia, as Baker, it is sufficient to abstract rules and scripts from the physical location in
which they take place. For both, social processes are considered to organise the use of
material artefacts, which appear as props in their account; a market-devices approach, on the
other hand, recognises the contribution of tools and artefacts to the development of social
routines, which arise not merely as solutions to problems but through repeated use of market
equipment.
Baker (1984) and Abolafia (1998) study infrastructures of pre-electronic markets that are
robustly physical. A more recent contribution comes from Zuckerman’s (2004) analysis of
security pricing. Zuckerman follows Baker in his understanding that the social structure is the
31
network of trade underlying markets, and that it emerges via attempts to solve market
problems. He understands classificatory structures as ‘socio-cognitive processes by which
market participants make sense of stocks even in the face of severe interpretative challenges’
(p.410). For Zuckerman, these processes are part of a ‘crude functionalism’ (p.428) that
allows markets to function. An alternative approach would be to consider the impact of
analysts’ tools on these classificatory structures, viewing them as ‘socio-material-cognitive’
processes; as Muniesa (2008:309) points out, market actors are complex arrangements, and
the absence, presence and variety of material devices constitute ‘economic actors that are
different and act differently’.
My analysis pursues Muniesa’s line of questioning further. The embeddedness of social
relationships in screens (Knorr Cetina & Bruegger, 2002) and telephones (Muniesa, 2008) is
well established. In my account, technology becomes more than a mediating device for wellknown and identifiable counterparts. The relationships of non-professional investors with
electronic others, with others instantiated in text, or with analytic programs alone emphasise
the importance of material devices in relationships. As Preda (2009) shows, solitary investors
conduct negotiations with others imagined in their computer screens: what kind of
embeddedness is this? My analysis is intended to develop, rather than to dismiss, the notion
of the embeddedness of economic transactions. It is quite clear that the investors studied
valued the consequences of socially-based economic relations as identified in social network
research: stability, trust, and better information. In this paper I show that the (largely
beneficial) properties and effects of social embeddedness, as set out by Uzzi (1997) can be
achieved by material relationships embedded into heterogeneous agencements, at times in the
absence of any social relationship – technologically mediated or otherwise. I suggest that,
while analysis of social structures remains a powerful tool for the analysis of markets, in
32
order to provide convincing accounts of economic embeddedness, a broader understanding of
‘social’ must be introduced; that a broadening of scope to include material categories can do
much to invigorate social network approaches.
A second implication stems from the potential for generalisation on the basis of a systematic
and plausible case study (Eisenhardt, 1989; Eisenhardt, 1991). In presenting a case relating to
one niche within a broad market of non-professional, retail or even leisure (Harrington, 2007)
investing – a group of time-rich UK investors who structure their activities around the faceto-face meetings where they were recruited – I cannot claim that my conclusions are
representative of the entire marketplace. I suggest, however, that the effects detailed in this
paper, and corroborated by existing literature on the professional marketplace, will occur in
other sectors of the financial market as experienced by non-professional investors, and that
this assumption may form a useful basis for future research. Moreover, where consumer
facing economic markets (markets for financial products such as insurance and mortgages,
for example) are increasingly served by electronic apparatus that resembles the agencements
discussed in the paper, I would suggest that there is considerable potential for extension of
the research topic into these areas.
As such, the argument has ramifications for approaches in economic sociology that
persistently view economic relations as comprising social relationships built on face-to-face
contact, or at the least technologically mediated relations between identifiable counterparts.
Micro-level approaches using, for example, a concept of structural holes to account for
entrepreneurial opportunity (Burt, 2005), might be more usefully served by following a
theoretical model informed by the notion of material networks and agencements (Roscoe, et
al., 2012). Macro-level theorising, wishing to take into account the claims of politics and
33
regulation on the embeddedness of global electronic financial markets (Sassen, 2005) may
also benefit from pursuing an analytic framework that is alive to the political, cultural, and
regulatory aspects of markets (Muniesa, et al., 2007; Çalışkan and Callon, 2009). As Latour
notes, macro-level social structures may usefully be understood as the product of a
‘summing up of interactions through various kinds of devices, inscriptions, forms and
formulae’ (Latour, 1999:17). My case study sees these concerns as inscribed in the devices
through which investors encounter the market. The heavy regulation of financial services in
the UK limits the scope and advice of products offered, and is evident in the disclaimers and
guidelines provided alongside tools and products and in promotional material. Cultural
practices may be seen in the understanding of market function, played out in debate and then
inscribed into devices; the debate of ‘technical versus fundamental’ becomes crystallised into
the choice between charting engine and Share Picker. Politics, both of resistance to
professional finance, and of the simultaneous exploitation of investors as investment service
consumers, likewise becomes enacted through the agencements of the non-professional
investors.
Politics suggests another avenue for future research: a critical (Alvesson and Deetz, 2000)
analysis of the relationship between non-professional investors and the investment service
firms. These firms have been present throughout my account, shadowy figures in the
background, yet instrumental in the production of the market for non-professionals. Carefully
distinguishing themselves from the underperforming and disliked fund managers and the
despised professional traders, these service firms provide the fundamental architecture of the
financial markets as encountered by non-professional investors; customers may come and go,
but the infrastructures of investor portal, investment road-show and brokerage site endure.
Academic research in finance provides much evidence that individual investors damage their
34
investment returns by taking unnecessary risks and trading too aggressively (Barber and
Odean, 2000; Barber, et al., 2009). Interviewees ascribed their lack of success to a lack of
discipline, or a problem with their method which further efforts would iron out; they
employed strategies of self-deception and mental accounting (Thaler, 1999) in order to
bolster their investment performance and stay in the game. Being an investor and staying in
the market requires considerable efforts in constructing and disciplining the self, a project
that may be best understood, as Harrington (2007) suggests, in terms of consumer aspiration
and self-identity (Schouten, 1991; Belk, et al., 1996). A critical, emancipatory position may
have much to offer investors as well as researchers.
In conclusion, let us reconsider the intention of this paper – to invigorate the notion of
economic embeddedness through an exploration of its material aspects. The paper has argued
that allowing the concept to include the material (understood as an agencement comprising
agency-filled, performative devices and texts) provides a rich and nuanced account of market
function that sits well in the context of global electronic financial markets. The paper has
illustrated its claims with a study of one group of stock market participants, and in doing so
has highlighted further peculiarity of material embeddedness – that the realm of physical
presentation and personal contact becomes of less value in terms of information, and more
important as a venue for political drama and the rhetorical construction of identity. The
material, on the other hand, displayed the characteristics most associated with sociallyembedded economic relations. A materially informed account of embeddedness can,
therefore, accommodate not only information, not only culture, regulation and politics but
also rhetoric and self-identity. By relaxing the notion that only the social matters (surely not
an overly contentious assertion in contemporary sociology) embeddedness becomes a
35
powerful analytic framework and one that holds much promise for future work in the
sociology of markets.
The term agencement, approximately translated as ‘assemblage’, stems from studies of distributed cognition
Hutchins, E., (1995), Cognition in the Wild, Cambridge, Mass.: The MIT Press., from actor network theory
Latour, B., (2007), Reassembling the Social: An Introduction to Actor-Network-Theory (New Edition): Oxford
University Press., and more recent work in economic anthropology Çalışkan, K. and Callon, M., (2009),
‘Economization, Part 1: Shifting Attention from the Economy Towards Processes of Economization’, Economy
and Society, 38 (3): 369 - 98, Çalışkan, K. and Callon, M., (2010), ‘Economization, Part 2: A Research
Programme for the Study of Markets’, Economy and Society, 39 (1): 1 - 32.. Agencement is a more useful term
than its English translation as it denotes the unity of agency and arrangement.
ii
86% of respondents were over 30 years of age with the modal category being 50 to 59 years. 84% of
questionnaire respondents were male. Despite my best efforts, I was only able to interview one female investor,
and noted that her opinions, phrases and even descriptive metaphors were very different from those of her male
peers.
iii
www.advfn.com
iv
Source, www.advfn.com [http://www.advfn.com/p.php?pid=advert_op, accessed 25 October 2010]
v
an observer might be struck by the prevalence of ‘spread betting’ advertisements on this page. At the time that
this research was carried out (2006-2007), spread betting is being aggressively promoted to investors as a taxfree means of emulating the margin trading available to professionals. Interviewees spoke in excitement of the
possibilities afforded to them, although one (Uno) remarks that he had lost £5000 almost immediately on joining
a spread bet cite. While research notes that the epiphenomena of gambling are evident among non-professional
investors Kumar, A., (2009), ‘Who Gambles in the Stock Market?’, The Journal of Finance, 64 (4): 1889-933.,
my interviewees actively rejected the notion that they gambled, and the theme is not pursued in this paper. A
similar rejection of gambling was encountered by Mayall Mayall, M., (2010), ‘A Feeling for Finance:
Motivations for Trading on the Stock Exchange’, Emotion, Space and Society, 3 (2): 103-10. in her study of
Australian non-professional investors.
vi
Source, www.advfn.com [http://www.advfn.com/p.php?pid=advert_op, accessed 25 October 2010]
vii
This author was, from 2001 to 2002, director of a company that operated investment bulletin boards.
viii
Beunza and Garud’s account of dot-com era stock valuations provides an ironic echo of Uzzi’s (1997)
‘paradox’ of embeddedness – that inward looking networks may suffer through ignoring important information
held by outsiders.
ix
http://info.redhotpennyshares.co.uk/ [accessed 11 August 2011]
x
IX 06, held in London’s Olympia in October 2006. The researcher gained permission from the organizer to
administer questionnaires and observe the exhibition.
i
36
Table 1: Antecedents and consequences of embeddedness and network structure (adapted
from Uzzi 1997)
Social Structural
Antecedents
Voluntary, noncontractual
contributions
Reciprocity
Components of an
Embedded Relationship
Trust
Face-to-face interaction
Fine grained information
Expert division of labour
Joint problem-solving
arrangements
Absence of pure exit option
37
Investor (Uzzi: firm) Level
Effects
Haggling and monitoring
costs
Privileged access to
resources
Exchange of difficult to price
resources
Information processing speed
and problem recognition
Knowledge of preferences
and better forecasts
Learning and performance
feedback
Invention of new solutions
Table 2: Interviewees
Pseudonym
Gender # of interviews
Age
Number of
Portfolio size
trades annually
Albert
M
1
60 or over
40
£101k-£150k
Anne
F
2
60 or over
5
£201k+
Chris
M
1
50-59
Daily
£151k-£200k
George
M
2
40-49
*
£201k+
James
M
1
60 or over
12
£101k-£150k
Karl
M
1
30-39
12
£51k-£100k
Max
M
1
40-49
Daily
£50k or less
Mickey
M
2
60 or over
Daily
*
Mike
M
1
60 or over
6
£101k-£150k
Nigel
M
2
30-39
*
£201k+
Peter
M
1
30-39
*
£101k-£150k
Robert
M
2
60 or over
Daily
£51k-£100k
Simon
M
2
40-49
20
*
Stewart
M
2
60 or over
4
£201k+
Sunil
M
†
40-49
*
*
Terry
M
1
30-39
50
£50k or less
Tony
M
1
40-49
Daily
£151k-£200k
Trevor
M
1
60 or over
2
£201k+
William
M
†
50-59
*
*
* Not known †Interviews not recorded
38
Table 3: Antecedents and components of social embeddedness: examples
Social Structural
Antecedents
Voluntary, non-contractual
contributions:
Reciprocity
Face-to-face interaction
Expert division of labour
Absence of pure exit option
Components of an
embedded relationship
Trust
Fine grained information
Joint problem-solving
arrangements
Materially embeddedness in financial markets
Online comment, shared research
Solitary productions of markets: databases and
scrapbooks
Generalized reciprocity i.e. public postings; investment
club sociality
Mediated through screen and print: interaction with
others known electronically.
Online market performances; real-world market
performances
Solitary performances, imagined others ‘ my friend Mr
Bulford’, the ‘muddy footprints’ of professionals
Reliance on material expertise: commentators, analytic
programs
Individual expertise (e.g. career background) shared
Long-term commitments e.g. pension fund management,
day-trading for a living, long-term contractual
obligations with suppliers
Generated through mediated relationships (through
print, online comment). Through direct relationships:
investor friends, trusted advisers and suppliers
Unilateral: reliance on heterogeneous others.
Detailed production of markets in shared spaces
Investment clubs, investment search networks
-
39
------------------------------------------------Figure i: The homepage of the ADVFN portal, www.advfn.com [accessed 9 July 2007]
----------------------------------------------
40
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