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Market efficiency as a revolution in data analysis
Author(s) -
Polillo Simone
Publication year - 2018
Publication title -
economic anthropology
Language(s) - English
Resource type - Journals
ISSN - 2330-4847
DOI - 10.1002/sea2.12117
Subject(s) - argumentation theory , ignorance , dominance (genetics) , scripting language , formative assessment , rhetoric , positive economics , tracing , economics , sociology , data science , epistemology , political science , computer science , law , pedagogy , philosophy , biochemistry , chemistry , linguistics , gene , operating system
Why did random walk models and market efficiency become central to financial economics, when other approaches did not? Attention to the terms of the debate that surrounded efficiency at a formative stage for the discipline reveals an emerging consensus about best practices in assembling data, framed in a mode of argumentation that emphasizes “reasonableness” over other standards. Changes in the scripts, and the broader styles, or “modes,” within which arguments in financial economics were couched, I submit, facilitated the rise to dominance of a type of research based on very specific kinds of data, paving the way for markets to be seen as efficient. The relationship between data‐driven knowledge and the systematic ignorance of what the data do not capture reveals the importance of tracing the practical consequences of the rhetoric of economics and invites broader questions about the effects data have on knowledge in other fields.