Get 20M+ Full-Text Papers For Less Than $1.50/day. Start a 14-Day Trial for You and Your Team.

Learn More →

Fundamentals of Algorithmic Markets: Liquidity, Contingency, and the Incomputability of Exchange

Fundamentals of Algorithmic Markets: Liquidity, Contingency, and the Incomputability of Exchange In light of the structural role of computational technology in the expansion of modern global finance, this essay investigates the ontology of contemporary markets starting from a reformulation of liquidity—one of the tenets of financial trading. Focusing on the nexus between financial and algorithmic flows, the paper complements contemporary philosophies of the market with insights into recent theories of computation, emphasizing the functional role of contingency, both for market trading and algorithmic processes. Considering the increasing adoption of advanced computational methods in automated trading strategies, this article argues that the event of price is the direct manifestation of the incomputability at the heart of market exchange. In doing so, it questions the ontological assumptions of “flow” and “fluidity” underpinning traditional conceptions of liquidity and challenges the notion of rationality in market behavior. Ultimately, the paper gestures toward some of the social and political consequences of this reformulation. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Philosophy & Technology Springer Journals

Fundamentals of Algorithmic Markets: Liquidity, Contingency, and the Incomputability of Exchange

Philosophy & Technology , Volume 31 (1) – Jan 4, 2017

Loading next page...
 
/lp/springer-journals/fundamentals-of-algorithmic-markets-liquidity-contingency-and-the-PhIpCEvcRV
Publisher
Springer Journals
Copyright
Copyright © 2017 by Springer Science+Business Media Dordrecht
Subject
Philosophy; Philosophy of Technology
ISSN
2210-5433
eISSN
2210-5441
DOI
10.1007/s13347-016-0249-8
Publisher site
See Article on Publisher Site

Abstract

In light of the structural role of computational technology in the expansion of modern global finance, this essay investigates the ontology of contemporary markets starting from a reformulation of liquidity—one of the tenets of financial trading. Focusing on the nexus between financial and algorithmic flows, the paper complements contemporary philosophies of the market with insights into recent theories of computation, emphasizing the functional role of contingency, both for market trading and algorithmic processes. Considering the increasing adoption of advanced computational methods in automated trading strategies, this article argues that the event of price is the direct manifestation of the incomputability at the heart of market exchange. In doing so, it questions the ontological assumptions of “flow” and “fluidity” underpinning traditional conceptions of liquidity and challenges the notion of rationality in market behavior. Ultimately, the paper gestures toward some of the social and political consequences of this reformulation.

Journal

Philosophy & TechnologySpringer Journals

Published: Jan 4, 2017

References