Counterperformativity

If speech can—in the famous argument of J. L. Austin—not only be true or false, but also do things, what about economic models? And what about when models go wrong, or actually undermine their own assumptions? Black–Scholes, gamma traps and gaming—a typology of the perverse effects of some key financial tools.

“Our argument is this: when analysing the effects of mathematical models on financial markets, attention ought to be paid not just to performativity, but also to ‘Counterperformativity’ . . . What, then, is our neologism good for? How can we, a sociologist (MacKenzie) and a literary theorist (Bamford), use Counterperformativity to analyse the operations of finance and the epistemology of mathematical modelling? Abstraction and empiricism are intertwined in the very notion of Counterperformativity, making it a particularly useful concept for our analysis of the curious ways in which models ‘fail’ . . . Counterperformativity’, however, is more than a routine misfire . . . ”