What is performativity?

• Any ideas?

• J.L. Austin (1962) is often credited for coining the term. For him performative sentences do not describe something, rather create or change it

  In saying, for instance, “I apolo­gize,” I am not reporting on an already existing state of affairs. I am bringing that state of affairs into being: to say “I apologize” is to make an apology. “I apologize” is, thus, a performative utterance. (MacKenzie et al. 2007)

• Another examples:

  • “You are found guilty”

  • “I now pronounce you husband and wife”

Performativity

• Comes from a long tradition of pragmatic semiotics (Charles S. Peirce, William James, John Dewey, Charles W. Morris, John R. Searle).

• Deals with the problem of how actions, entities, and representa­tions are intertwined in speech.

• Conditions of performativity are not only linguistic, but also social and material

  • For “You are found guilty” to have power, there must exist a whole system of legal institutions with reinforcement mechanisms

• Synonyms: “Self-fulfilling prophecy” (Merton 1949)

Performativity in STS

• Science often makes claims that have some performative power

• Scientific representations of the world are closely linked with interventions in that world (Hacking 1983)

• Science not only “represents nature” but also performs it (Pickering 1995)

  • We often think of atoms as small particles that hit each other

• Social sciences create categories to describe “reality” but people become aware of those categories and this changes their behavior

  • Think of “privileges” and how checking “privileges” became a social practice

Economics

• One discipline in Social Sciences stands out in its performativity — Economics

• Economics does not only depict an already existing state of affairs but also constructs the very objects it studies (Callon 1998)

The efficient market hypothesis

• Hypothesis: Prices in financial markets fully reflect available information

• This hypothesis “created” indices like Dow Jones, S&P, or Nasdaq and the practice of investing into those indices

  • The main idea is that it is impossible to “beat the market”, so one needs to follow it

• Empirical data provides regular evidence against the efficient market hypothesis, “anomalies”

• Researchers and practitioners use “anomalies” to beat the market contributing to the elimination of “anomalies” and hence creating of the ideal market

The efficient market hypothesis

Thus financial economics in the form of the efficient-market hypothe­sis has not simply been “applied” (for example, in the form of index funds): “failed” tests of the hypothesis have given rise to practical action that generally has had the consequence of tending to restore the hypothesis’s empirical validity. It is this kind of interweaving of “words” and “actions”-of representations and interventions-that the concept of “performativity” is designed to capture. (ibid, 5)

By Marie-France Garcia-Parpet (2007)

• In 1981 a marketplace for table strawberries trading was created at Fontaines-en-Sologne

Description

• The strawberry exchange attracts strawberry grow­ers, but also wholesalers and shippers from the region

• It is in the middle of the countryside and consists of a building with two parts: showroom and salesroom

• The salesroom has three parts: the auctioneer’s room, the sellers’ room, and the buyers’ room

• Transactions are performed through an electronic scoreboard, and take the form of a descending-price or “Dutch” auction

  • the auctioneer starts with a high price and then gradually lowers it until the goods in question are sold

What is a perfect market?

A perfect market in theory is defined by 4 conditions:

• Agents cannot shape prices

• The product is homogeneous

• Free entrance to and exit from the market

• The market is transparent

Is this a perfect market?

• Each day, the market brings about thirty-five producers and ten buyers together