“The Social Structure of Algorithmic Trading.” Christian Borch at Kings’ Financial Work Futures Research Centre

From Rita Samiolo

Financial Work Futures Research Centre Seminar: “The Social Structure of Algorithmic Trading”
Professor Christian Borch, Copenhagen Business School

Wednesday 12th June 2019, 4:00PM – 5:30PM
Bush House (S) 3.01

Dear colleague,

Please join us for the next FinWork Futures Research Seminar, by Professor Christian Borch from Copenhagen Business School. It will take place on the 12th of June, 4pm in BH (S) 3.01.

Abstract: The rise of new economic sociology in the early 1980s owed much of it success to advances in social network theory. Pioneering work, such as that of Wayne Baker, demonstrated that even the ‘engine room’ of financial markets – the so-called trading floors on which traders were competing with one another – were embedded in social networks. Interestingly, however, the traditional face-to-face networks of financial exchanges only play a marginal role in present-day markets, in which human traders are increasingly being replaced by fully automated algorithms. This prompts the question of whether the type of social network theory that has figured centrally within new economic sociology remains analytical useful when, in fact, it is fully automated algorithms which are behind the bulk of today’s trading. In other words, is social network theory still a potent framework with which to understand financial trading when such trading takes place in an increasingly non-human setting? In this paper, we update social network theory for an algorithmic, non-human market environment. By combining qualitative fieldwork and agent-based modelling, we examine the types of networks that exist between algorithmic market participants. Extending insights by Karin Knorr Cetina, Alex Preda and Donald MacKenzie, we suggest that algorithms engage in social relationships with one another and that social network theory is helpful in shedding light on this social structure of algorithmic trading.
Bio note: Christian Borch is Professor of Economic Sociology and Social Theory at the Department of Management, Politics and Philosophy, Copenhagen Business School, Denmark. Christian’s current work focuses on algorithmic finance and he is the PI of an ERC-funded research project on this topic. His next book is titled Social Avalanche: Crowds, Cities and Financial Markets (forthcoming with Cambridge University Press).