Relationships of collapse: network brokerage, opportunism and fraud in financial markets

2017 ◽  
Vol 44 (12) ◽  
pp. 2097-2111 ◽  
Author(s):  
Bryce Hannibal ◽  
Hiroshi Ono
Keyword(s):  
Financial Markets ◽  
Social Relations ◽  
Financial Sector ◽  
Theoretic Approach ◽  
Network Ties ◽  
Wall Street ◽  
Content Type ◽  
Network Characteristics ◽  
Network Location ◽  
Telecommunications Market

Purpose This paper explores the social-behavioral aspects of financial markets. The purpose of this paper is to examine the role of social relations and networks which contributed to the market crash in the US telecommunications sector in the late 1990s. Design/methodology/approach A network theoretic approach is used to examine historical qualitative data. The authors suggest that the network characteristics of financial intermediaries allowed security analysts to control and manipulate information that was disclosed to the investing public. Findings The authors find evidence that brokerage locations in the network of actors within the telecommunications market allowed select individuals opportunities to engage in unethical behavior and malfeasance. The authors further highlight the harmful effects of over-embeddedness by illustrating that strong and dense network ties within the financial sector were exploited to distort the flow and reliability of information. The paper concludes with a note on the generalizability of this study and an examination of the current economic-legal structure of Wall Street. Originality/value Recently, some economists and network scholars have begun examining social relations more thoroughly in the financial sector. This paper is one of the first that focuses specifically on the role and network location of research analysts prior to a market collapse.

Prospects for Turkey in the second quarter

2015 ◽  
Keyword(s):  
Financial Markets ◽  
Financial Sector ◽  
The Political ◽  
Content Type ◽  
The Past ◽  
Political Crises ◽  
Wait And See ◽  
Election Victory ◽  
Legitimacy Crisis ◽  
Legislative Election

Subject Prospects for Turkey in the second quarter. Significance President Recep Tayyip Erdogan and the Justice and Development Party (AKP) have survived the political crises of the past year with little damage and, short of a substantial economic or legitimacy crisis, will likely score another legislative election victory on June 7. Businesses, the financial sector and households are all likely to remain in wait-and-see mode, and financial markets to be jittery.

Taking the Floor

2019 ◽  
Author(s):  
Daniel Beunza
Keyword(s):  
Organizational Culture ◽  
Financial Markets ◽  
Social Relations ◽  
Moral Disengagement ◽  
Financial Models ◽  
Financial Reform ◽  
Moral Norms ◽  
Wall Street ◽  
Use Of Models ◽  
Blind Spots

Debates about financial reform have led to the recognition that a healthy financial system does not depend solely on how it is structured—organizational culture matters as well. Based on extensive research in a Wall Street derivatives-trading room, this book considers how the culture of financial organizations might change in order for them to remain healthy, even in times of crises. In particular, the book explores how the extensive use of financial models and trading technologies over the recent decades has exerted a far-ranging and troubling influence on Wall Street. How have models reshaped financial markets? How have models altered moral behavior in organizations? The book takes readers behind the scenes in a bank unit that, within its firm, is widely perceived to be “a class act,” and it considers how this trading room unit might serve as a blueprint solution for the ills of Wall Street's unsustainable culture. It demonstrates that the integration of traders across desks reduces the danger of blind spots created by models. Warning against the risk of moral disengagement posed by the use of models, the book also contends that such disengagement could be avoided by instituting moral norms and social relations. The book profiles what an effective, responsible trading room can and should look like.

Matchmakers and Markets

2020 ◽  
Author(s):  
Yi-Cheng Zhang
Keyword(s):  
Financial Markets ◽  
Policy Maker ◽  
Real World ◽  
World Economy ◽  
Market Theory ◽  
Wall Street ◽  
The Real ◽  
Information Intermediaries ◽  
Consumer Markets ◽  
High Street

In attempting to understand the bewildering complexity of consumer markets, financial markets, and beyond, traditional textbooks and theories will not help much. This book presents a new market theory in which information plays the most important role. Markets are portrayed with three categories of actor: consumers, businesses, and information intermediaries. The reader can determine his own role, and with analysis and examples from the real-world economy, new questions can be raised and individual conclusions drawn. The aim is to stimulate the reader’s own thinking, either as a consumer on the high street, an investor on Wall Street, a policy maker in a government armchair, or an entrepreneur dreaming of the next big opportunity. This book should also generate and inspire academic debates, as the claims and conclusions are often at odds with mainstream theory.

scholarly journals Debt and Sacrifice: The Role of Scapegoats in the Economic Crises

Religions ◽  
2021 ◽  
Vol 12 (2) ◽  
pp. 128
Author(s):  
Luis Enrique Alonso ◽  
Carlos J. Fernández Rodríguez
Keyword(s):  
Financial Markets ◽  
Social Relations ◽  
Critical Role ◽  
Social Groups ◽  
Symbolic Violence ◽  
Personal Bankruptcy ◽  
Economic Relations ◽  
Modern Economy ◽  
Standards Of Living

Despite the process of secularization and modernization, in contemporary societies, the role of sacrifice is still relevant. One of the spaces where sacrifice actually performs a critical role is the realm of modern economy, particularly in the event of a financial crisis. Such crises represent situations defined by an outrageous symbolic violence in which social and economic relations experience drastic transformations, and their victims end up suffering personal bankruptcy, indebtedness, lower standards of living or poverty. Crises show the flagrant domination present in social relations: this is proven in the way crises evolve, when more and more social groups marred by a growing vulnerability are sacrificed to appease financial markets. Inspired by the theoretical framework of the French anthropologist René Girard, our intention is to explore how the hegemonic narrative about the crisis has been developed, highlighting its sacrificial aspects.

Heuristic biases in investment decision-making and perceived market efficiency

2018 ◽  
Vol 10 (1) ◽  
pp. 85-110 ◽  
Author(s):  
Syed Zulfiqar Ali Shah ◽  
Maqsood Ahmad ◽  
Faisal Mahmood
Keyword(s):  
Financial Markets ◽  
Market Efficiency ◽  
Negative Impact ◽  
Investment Decisions ◽  
Sampling Technique ◽  
Investment Strategy ◽  
Individual Investors ◽  
Content Type ◽  
Specific Investment ◽  
The Relationship

Purpose This paper aims to clarify the mechanism by which heuristics influences the investment decisions of individual investors, actively trading on the Pakistan Stock Exchange (PSX), and the perceived efficiency of the market. Most studies focus on well-developed financial markets and very little is known about investors’ behaviour in less developed financial markets or emerging markets. The present study contributes to filling this gap in the literature. Design/methodology/approach Investors’ heuristic biases have been measured using a questionnaire, containing numerous items, including indicators of speculators, investment decisions and perceived market efficiency variables. The sample consists of 143 investors trading on the PSX. A convenient, purposively sampling technique was used for data collection. To examine the relationship between heuristic biases, investment decisions and perceived market efficiency, hypotheses were tested by using correlation and regression analysis. Findings The paper provides empirical insights into the relationship of heuristic biases, investment decisions and perceived market efficiency. The results suggest that heuristic biases (overconfidence, representativeness, availability and anchoring) have a markedly negative impact on investment decisions made by individual investors actively trading on the PSX and on perceived market efficiency. Research limitations/implications The primary limitation of the empirical review is the tiny size of the sample. A larger sample would have given more trustworthy results and could have empowered a more extensive scope of investigation. Practical implications The paper encourages investors to avoid relying on heuristics or their feelings when making investments. It provides awareness and understanding of heuristic biases in investment management, which could be very useful for decision makers and professionals in financial institutions, such as portfolio managers and traders in commercial banks, investment banks and mutual funds. This paper helps investors to select better investment tools and avoid repeating expensive errors, which occur due to heuristic biases. They can improve their performance by recognizing their biases and errors of judgment, to which we are all prone, resulting in a more efficient market. So, it is necessary to focus on a specific investment strategy to control “mental mistakes” by investors, due to heuristic biases. Originality/value The current study is the first of its kind, focusing on the link between heuristics, individual investment decisions and perceived market efficiency within the specific context of Pakistan.

Community-based disaster communication: how does it become trustworthy?

2016 ◽  
Vol 25 (4) ◽  
pp. 478-491 ◽  
Author(s):  
Dwie Irmawaty Gultom
Keyword(s):  
Disaster Response ◽  
Information Diffusion ◽  
Weak Ties ◽  
Network Ties ◽  
Community Based ◽  
Strong Ties ◽  
Content Type ◽  
Individual Level ◽  
Disaster Communication ◽  
Disaster Information

Purpose – Trust in disaster communication is significant because a lack of trust will prevent the transformation of information into usable knowledge for an effective disaster response. Therefore, the purpose of this paper is to investigate how the culture and network ties of an affected community can encourage trust and participation in disaster communication. Design/methodology/approach – A qualitative case study of Jalin Merapi (JM) was conducted by interviewing 33 research participants in the Mt Merapi surroundings. Findings – The findings indicate that culture-embedded disaster communication plays important roles in increasing the effectiveness of disaster information and encouraging trust in the authenticity of locally based disaster information at the individual level. The findings also identify that strong ties and weak ties play different roles in disaster communication. The strong ties are more effective in facilitating information diffusion and encourage trust and community participation within the affected community. Furthermore, the weak ties are more effective in disseminating information to wider audiences, and have an indirect influence in encouraging trust by extending the offline social network owned by the affected community. Originality/value – Most literature on disaster communication focusses on the construction of disaster messages to encourage effective disaster response. Less attention has been paid to the information receivers regarding how disaster information is considered to be trustworthy by the affected community and how it can increase collective participation in community-based disaster communication.

scholarly journals The future of financial markets and regulation: what strategy for Europe?

foresight ◽  
2014 ◽  
Vol 16 (2) ◽  
pp. 95-108 ◽  
Author(s):  
Jean-Baptiste Gossé ◽  
Dominique Plihon
Keyword(s):  
Financial Markets ◽  
Capital Market ◽  
Financial Stability ◽  
Design Methodology ◽  
Financial Integration ◽  
Content Type ◽  
Realistic Option ◽  
The Future ◽  
Unstable Environment ◽  
Insight Into

Purpose – This article aims to provide insight into the future of financial markets and regulation in order to define what would be the best strategy for Europe. Design/methodology/approach – First the authors define the potential changes in financial markets and then the tools available for the regulator to tame them. Finally, they build five scenarios according to the main evolutions observed on the financial markets and on the tools used by the regulator to modify these trends. Findings – Among the five scenarios defined, two present highly unstable features since the regulator refuses to choose between financial opening and independently determining how to regulate finance in order to preserve financial stability. Three of them achieve financial stability. However, they are more or less efficient or feasible. In terms of market efficiency, the multi-polar scenario is the best and the fragmentation scenario is the worst, since gains of integration depend on the size of the new capital market. Regarding sovereignty of regulation, fragmentation is the best scenario and the multi-polar scenario is the worst, because it necessitates coordination at the global level which implies moving further away from respective national preferences. However, the more realistic option seems to be the regionalisation scenario: this level of coordination seems much more realistic than the global one; the market should be of sufficient size to enjoy substantial benefits of integration. Nevertheless, the “European government” might gradually increase the degree of financial integration outside Europe in line with the degree of cooperation with the rest of the world. Originality/value – Foresight studies on financial markets and regulation are quite rare. This may be explained by the difficulty to forecast what will be their evolution in the coming decades, not least because finance is fundamentally unstable. This paper provides a framework to consider what could be the best strategy of regulators in such an unstable environment.

Gaming the gamer? – The ethics of exploiting psychological research in video games

2016 ◽  
Vol 14 (2) ◽  
pp. 106-123 ◽  
Author(s):  
Johnny Hartz Søraker
Keyword(s):  
Video Games ◽  
Social Relations ◽  
Video Game ◽  
Game Design ◽  
User Behavior ◽  
Well Being ◽  
Psychological Research ◽  
Rating Systems ◽  
Content Type ◽  
Ethical Implications

Purpose The purpose of this paper is to investigate the ethical implications of video game companies employing psychologists and using psychological research in game design. Design/methodology/approach The author first argues that exploiting psychology in video games may be more ethically problematic than familiar application domains like advertising, gambling and political rhetoric. Then an overview of the effects particular types of game design may have on user behavior is provided, taking into account various findings and phenomena from behavioral psychology and behavioral economics. Findings Finally, the author concludes that the corresponding ethical problems cannot – and should not – be addressed by means of regulation or rating systems. The author argues instead that a more promising countermeasure lies in using the same psychological research to educate gamers (children in particular) and thereby increase their capacity for meta-cognition. Originality/value The importance of this lies in the tremendous effect these behavior-modifying technologies may have upon our self-determination, well-being and social relations, as well as corresponding implications for the society.

Strategic alliances of shopping centers in Brazil: network perspective

2017 ◽  
Vol 15 (2) ◽  
pp. 167-186 ◽  
Author(s):  
Renata Maria de Almeida Bastos Gomes ◽  
Fabio de Oliveira Paula ◽  
T. Diana L. van Aduard de Macedo-Soares
Keyword(s):  
Strategic Alliances ◽  
Content Type ◽  
Network Characteristics ◽  
Alliance Networks ◽  
Slowing Down ◽  
Contractual Arrangements ◽  
Management Perspective ◽  
Relational Factors ◽  
The Right

Purpose The shopping center (SC) industry in emerging countries has grown fast over the past decade; however, recently, it is showing signs of slowing down. Nevertheless, some SC-companies perform well. As those firms operate in alliance networks, relational opportunities and risks should be considered in their strategic analyses. Although there is a significant amount of research on SC from a marketing perspective, there is a dearth of research on strategic alliances from an SC management perspective. This paper aims at answering the following question: How do characteristics of the alliance networks of leading SC-companies contribute to their success by mitigating the structural threats the SC-industry in Brazil is facing? Design The case study method was adopted for analyzing two leading Brazilian SC-companies. Several data sources were used to allow for data triangulation. The lack of literature on strategic alliances and the SC-industry, as well as the research’s exploratory nature, justified this choice. Findings The research made evident that the SC-companies’ alliance network characteristics not only mitigate some of the structural industry threats but also enhance opportunities. It illustrated how firms can conduct a strategic analysis from a network perspective with the right tools. It also made evident how much more accurate the results of a comprehensive relational analysis are compared with traditional analyses that do not consider the strategic implications of relational factors. Practical implications The research contributed to SC management by highlighting the importance of taking into account the network characteristics of their relationships with key partners and of considering these as alliances and not merely contractual arrangements. Originality/value There is a dearth of research on the strategic implications of alliances of firms that own and manage a portfolio of SCs, as well as of their relationships with other actors in the industry, such as retailers and real estate owners, from a network perspective.

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