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Blended automation: integrating algorithms on the floor of the New York Stock Exchange

Beunza, Daniel and Millo, Yuval (2015) Blended automation: integrating algorithms on the floor of the New York Stock Exchange. SRC Discussion Paper, No 38. Systemic Risk Centre, The London School of Economics and Political Science, London, UK.

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Identification Number: No 38

Abstract

The recent automation of the American stock market has replaced floor intermediaries with trading algorithms, calling into question the sociological claim that markets are structured by networks of intermediaries. Our study examines the social nature of markets in automated settings with an inductive, qualitative study of the automation of the NYSE during the period 2003-12. It proposes the concept of blended automation to denote an automation design that preserves the social structure of a market. Our analysis of the Flash Crash of 2010 suggests that such design offers greater resilience to economic shocks. Our study contributes to the literature on technology in organizations by characterizing a novel automation design that reconciles technology with social relations, and contributes to economic sociology by outlining how automated markets can remain socially structured, pointing to role of politics, ideology and design in market automation.

Item Type: Monograph (Discussion Paper)
Official URL: http://www.systemicrisk.ac.uk/
Additional Information: © 2015 The Authors
Subjects: H Social Sciences > HD Industries. Land use. Labor
H Social Sciences > HD Industries. Land use. Labor > HD28 Management. Industrial Management
Sets: Departments > Management
Research centres and groups > Systemic Risk Centre
Date Deposited: 21 Jan 2016 12:31
Last Modified: 01 Feb 2016 09:38
Projects: ES/K002309/1
Funders: Economic and Social Research Council
URI: http://eprints.lse.ac.uk/id/eprint/65090

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