Year: 2014
Type: article
Abstract: This article develops a sociologically informed approach to market bubbles by integrating insights from financial-economic theory with the concepts of voice and dissimulation from other cases of distorted valuation studied by sociologists (e.g., witch hunts, unpopular norms, and support for authoritarian regimes). It draws on unique data—longitudinal interviews with private equity market participants during and after that market’s mid-2000s bubble—to test key implications of two existing theories of bubbles and to move beyond both. In doing so, the article suggests a crucial revision to the behavioral finance agenda, wherein bubbles may pertain less to the cognitive errors individuals make when estimating asset values and more to the sociological and institutionally driven challenge of how to interpret complex social and competitive environments.
Source: Sociological Science
DOI: 10.15195/v1.a7
Authors: Catherine Turco, Ezra Zuckerman
Institutions: Massachusetts Institute of Technology, Brandeis University
Language: English
Subfield: Accounting
Domain: Social Sciences
Open Access status: gold
Estimated APC paid: $575
OpenAlex ID: W2134704542