Financial Markets are Markets in Stories: Some Possible Advantages of Using Interviews to Supplement Existing Economic Data Sources
University College London (UCL)
November 21, 2012
Journal of Economic Dynamics and Control, Vol. 36, No. 8, 2012
Fifty-two research interviews were conducted with money managers controlling over $500 billion. This paper presents detailed material from one interview to argue interviews usefully describe their shared reality and provide information about the conditions of action facing financial decision-makers with implications for aggregate behavior. Their shared reality was dominated by 'radical' uncertainty and information ambiguity which severely limited the scope for 'fully rational' decision-making. How they managed to commit to decisions was by creating narratives. The study suggests it may be useful to reconsider prejudices against the usefulness of talking to individual economic agents about what they actually do.
Keywords: financial markets, interviews, economic methodology, narrative, uncertainty
JEL Classification: B4, G1
Date posted: November 21, 2012