Autore
Esposito, Elena

Titolo
Economic Circularities and Second-Order Observation: The Reality of Ratings
Periodico
Sociologica
Anno: 2013 - Volume: 19 - Fascicolo: 2 - Pagina iniziale: 1 - Pagina finale: 10

Can observers observe the economy from outside? Recent developments in economicsociology tend to blur the classic distinction and combination of economy and society and tomove to a condition in which the observer (each observer) is inside the society he describes.The behavior of financial actors can be analyzed combining two concepts with a long traditionand many implications: beauty contest and moral hazard - and can then be translated into theterms and the tradition of observation theory. Keynes' beauty contest can be interpreted as asystematic recognition of second-order observation: financial operators observe primarily otherobservers and what they observe. This observation produces particular circularities - first of allthe insoluble problem of moral hazard, which reproduces in the field of finance Merton's famousmodel of self-defeating/self-fulfilling prophecies.If finance is second-order observation, however, its movements cannot be explained by referenceto the world, but rather to observation and its structures: the reality reference of financeis increasingly provided by ratings, which offer information not on how the world is, but onwhat the others observe. The spread of ratings in recent decades and the doubts about theirreliability are related in the article to the generalized move of modern society to second-orderobservation, that produces specific problems and specific puzzles, but also structures andconstraints.



SICI: 1971-8853(2013)19:2<1:ECASOT>2.0.ZU;2-S
Testo completo: http://www.mulino.it/download/article/10.2383/74851
Testo completo alternativo: http://www.mulino.it/doi/10.2383/74851

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