Department of Accounting and Management Control
A Research Seminar
A Sociology of Algorithms: High-Frequency Trading and the Shaping of
Markets
will take place
on
Friday March 20, 2015
From 2:00 to 4:00pm
In HEC Campus, room T017
Donald Mackenzie
University of Edinburg
Abstract :
Computer algorithms are playing an ever more important role in financial markets. This paper
proposes and exemplifies a sociology of algorithms that is (i) historical, in that it demonstrates
path-dependence in the development of automated markets; (ii) ecological (in Abbott’s
sense), in that it shows how automated high-frequency trading (HFT) is both itself an ecology
and also is shaped by other linked ecologies (especially those of trading venues and of
regulation); and (iii) “Zelizerian,” in that it highlights the importance of boundary work,
especially of efforts to distinguish between (in effect) “good” and “bad” actors and
algorithms. Empirically, the paper draws on interviews with 43 practitioners of HFT, and on a
wider historical-sociology study (including interviews with a further 44 people) of the
development of trading venues. The paper investigates the practices of HFT and analyses (in
historical, ecological, and “Zelizerian” terms) how these differ in three different contexts (two
types of share trading and foreign exchange).