Christian Borch, professor at Copenhagen Business School, has been awarded a prize from the ASA’s theory section for his excellent work in The Politics of Crowds (Cambridge, 2013). The book traces the changing relationship between crowds and rationality within 19th Century sociology.

Christian reminds us that long before ‘ask the audience’ was a useful lifeline on Who Wants to be a Millionaire?, crowds were considered to be a destructive, contagious and irrational force that could threaten social order. To get a taste for the history, you can check out an early article where he argues that the “re-description of crowd behaviour in rational terms” obliterated “almost every distinguishing trait that the crowd possessed according to 19th-century semantics” (see European Journal of Social Theory, 2006).

Since completing the book, Christian has launched a research colloquium to explore ‘Crowd Dynamics and Financial Markets’. If you can’t make it to Copenhagen, the website for the initiative is an interesting resource where you can learn more about some of the work-in-progress on finance across Europe.  

On November 24-25, the group will host a special workshop on ‘High-frequency trading sociality, crowd psychology and dynamic collectives‘. Abstracts no longer than 500 words should be submitted to Ann-Christina Lange ( by September 30 2014.

In 1992, Stella Liebeck was badly burned when a cup of coffee from McDonalds spilled on her lap.

If you’re curious to know more about how and why a jury of her peers awarded her $2.9 million then have a look at this thoughtful review of the story on RetroReports, a documentary news initiative that revisits and reexplains big stories from decades past.

This is an excellent case study in valuation. Liebeck’s story shows that value doesn’t make sense without also understanding the process, the mechanism, by which value is assessed.

If you thought the case was frivolous have a good look at the photos of the physical damage Liebeck suffered. It’s hard to grasp how so much damage could have been caused by a little cup of coffee. The images featured in the report are truly gruesome.


CFP: Investigating High-Frequency Trading. Theoretical, social and anthropological perspectives.

For details click the following link: CFP – Investigating HFT

Organised by:

Ann-Christina Lange, Assistant Professor, Copenhagen Business School (

Marc Lenglet, Lecturer in Management, European Business School Paris (

Robert Seyfert, Postdoctoral Fellow, Cluster of Excellence, Konstanz University (

Deadline (for Workshop 1 in Copenhagen): September 30, 2014.

The 1980s are over

July 7, 2014

In 1989, a brutal crime seized the civic imagination of New Yorkers. The victim, an ambitious young investment banker working in the corporate finance department of Solomon Brothers, would simply be known as ‘The Jogger’.

The Jogger was out for a run into central park after-work, when she was viciously attacked, dragged into the bushes, severely beaten and raped. As one reporter noted at the time of the trial, The Jogger was “part of the wave of young professionals who took over New York in the 1980’s. Some among them had seemed convinced that if you worked hard enough and exercised long enough, you could do anything; even go into the park at night.” (NYTimes)

As the decade of Me drew to a close, The Jogger became NY’s symbol of a courageous middle-class figure dragged down by the grimy underbelly of a city in deep recession. But of all the crimes that happen in New York, why the intense focus on this particular woman? Why the sensation around this particular case?

Essayist Joan Didion asked this very question in 1991, in a probing NYRB article entitled New York: Sentimental Journeys.

The answer Didion provides is sociologically quite complex, traversing everything from race relations and sexual politics in America, to the historical design of central park. What surprised me the most in her analysis, however, is that she also ties the symbolic charge of The Jogger to the crash of October 1987, which she says “damaged the illusions of infinite recovery and growth on which the city had operated during the 1980s”.

In 1990, it felt as though there was something wrong with New York. Didion reports that people were talking about “their loss of flexibility, about their panic, their desolation, their anger, and their sense of impending doom”. The public, she says, associated its sense of anxiety with accusations of wild behavior in the public space. New Yorkers were eager, too eager, to believe their uneasiness was caused by the teenagers roaming in the park that night, five of whom were publicly arrested, humiliated and convicted of the crime.

Didion objects. The teenagers are not to blame.

These people were talking instead about an immediate fear, about money, about the vertiginous plunge in the value of their houses and apartments and condominiums, about the possibility or probability of foreclosure and loss; about, implicitly, their fear of being left, like so many they saw every day, below the line, out in the cold, on the street.

They were not, she said, “talking about drugs, or crime, or any of the city’s more publicized and to some extent inflated ills”.

Didion was right. In 2002, having already served a collective 41 year in prison, the five men had their convictions overturned. A serial offender who was behind bars confessed to the attack on Trisha Meili in 1989, and DNA evidence later confirmed.

Last week, the five men received a $41 million dollar settlement from the city of New York. For them, the 1980s are only now over. The riches they couldn’t access before, their belated share, has finally been doled out.


Here comes my favourite part of the year. It’s sunny again in London, Wimbledon is in full swing, and the second edition of the LSE Summer School in sociology of finance is about to start.

This three-week course for advanced undergraduates came into existence last year at LSE. It offers a new way of thinking about the capital markets, one that is different from neoclassic finance, and from behavioural economics. And the response from the students surprised even its perennially optimistic organizer, that is, myself.

So as I had sat with a coffee at Fields the other day, I asked myself: what to do to live up to the expectations? There’s even more students this year. The admissions office tells me they’re very well prepared. And with the latest round of bank scandals this year, be it Barclay’s dark pool, or BNP Paribas’ sentence, there seems to be greater than ever need for fresh thinking about finance.

So for starters, I decided to keep the good stuff. We’re staying in 32 London Fields, the coolest (and most convoluted) Victorian building ever built. We’ve kept the lectures by Yuval Millo, and by Juan Pablo Pardo-Guerra. Our volunteer TA from last year, Nina Andreeva, has now been promoted to lecturer for one session. Most importantly, we’ve kept the speakers. One per day, hectic as it sounds. So we have a managing director from a large bank in the City, a consultant on bank culture, two managers from a ratings agency, a hedge fund portfolio manager, an official from the Bank of England. And more.

There are also improvements. We have a one-day lecturer in financial communication, Franscisco Blanco, who ran the investor relations of Telefonica for a decade. I have reduced the amount of homework (I knew you’d like that). And most importantly, we have a new and energetic TA, Megan Peppel, who is taking one month off from her busy doctorate in UC Berkeley (California) to be with us this July.

For those of you who are interested, here’s the syllabus: MG301 Firms Markets Crisis Summer School reading list

So this is it. Class starts on Monday. Looking forward to it!

The Supreme Court in the US has just made a ruling that corporate misstatements is perhaps not so important if market prices are already imperfect. According to the NYTimes,

The court used that distinction to make an important change in the class-action arena. From now on, companies facing class actions can try to show at an early stage that even if they’ve made misstatements, market prices were not affected.

In other words, the ruling allows “companies to raise the issue that a stock wasn’t impacted by the fraudulent statements at the class certification stage.

The argument, which appeals to the fallibility of the the efficient market hypothesis, was introduced by Halliberton  in a case involving its asbestos liabilities.

The idea that changes in economic theory can impact on class action law is super interesting, but from a legal perspective the ruling is just tinkering (see here).


The Bank of England’s currency is no good on London buses.

As of July 6, if you want a ride on an iconic red double-decker, you’ll have to load value into a privately managed digital system and swipe it out using your Oyester card.

Cashlessness will push the privatization of public transport to a whole new level. And this time, Margaret Thatcher has nothing to do with it.

In fact, I’ll bet it never occurred to Mrs. Thatcher that privitization could lead to financialization. And private payment infrastructure is nothing if not a tool for financializing operations.

When the consumer is forced to pay for more than just the ride that they need, getting from A to B becomes a relationship that looks a lot more like credit and less like exchange.

The terms of this relationship are pretty good if you’re a business entity like Transport for London. By separating the moment of payment from the moment of service, digital infrastructure makes sure we’re always paying TFL for more than we’re taking. For the TFL, this transforms ticket sales into a manageable stream of revenue, while for the consumer it turns fares into a forced transfer of savings.

The Evening Standard reports that £100m is stuck on unused Oyester cards, which shows just how effectively the system transfers risk onto users.

Users that cannot afford to take on the burden of advanced payment can grab their brolly and walk. The £5 deposit on the plastic chip card acts as a baseline barrier to entry, and you can only become a passenger if you can afford to keep a store of value lock into the card.

Logistical considerations add further to the cost that falls on the consumer. Before traveling on the bus, people who can’t do online banking must take the time and effort to convert cash into digital credit at a corner-store or tube station.

Without cash, inclusion and exclusion from transportation is not just a socio-economic condition. The technical system of payment creates an additional qualification over and above money that determines who can and cannot travel. Let’s call this quality ‘rideworthiness’ – a person’s ability to maintain constant contact within a specific technical system. The Evening Standard projects that as many as 2,000 people could end up stranded every day because that’s how many cards get lost or stolen.

Yup, that’s me out there, standing out in a cold rain, rummaging through my purse. My Oyester card is in the back pocket of the jeans I threw in the laundry this morning before I decided to walk to work.

But maybe I should feel good as I tromp over to Holborn station to put my downpayment on a new Oyester. After all, I’m helping the TFL save an additional £24m each year because they no longer have to count my heavy pound coins. Their gain is my miserable wet walk. This is my share of the public’s burden of reducing TFL’s operating cost.


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