Creating the CBOE required costly unpaid collective effort by exchange members

Evidence

The time-consuming, expensive lobbying, planning, and preparatory work that established the CBOE had many of the characteristics of collective action. The CBT was not a hierarchical corporation but a membership organization that elected its officials and voted on key decisions. CBT employees were paid for their work, but expenses were ultimately borne by the members of the CBT as a whole, and some members—Edmund O’Connor (the key original proponent of options), Irwin Eisen (chair of the Floor Procedures Subcommittee), and others such as David Goldberg, Patrick Hennessy, and Paul McGuire—took on substantial unremunerated commitments, which continued after the CBOE opened. O’Connor, Eisen, and Goldberg, for example, would sometimes lend newcomers the money (initially $10,000 but soon more) to buy a membership, with no certainty that the newcomer would succeed and be able to pay them back. — Donald MacKenzie & Yuval Millo, Constructing a Market, Performing Theory, 69

Categorization

• XREF: connects to: Rational-egoist theory cannot explain why anyone founded the CBOE — Donald MacKenzie & Yuval Millo, Constructing a Market, Performing Theory, 74; Options-exchange founders worked unpaid out of felt obligation to the exchange community — Donald MacKenzie, An Engine, Not a Camera: How Financial…, 677; Traders made costly unremunerated commitments to build the exchange, resembling collective action. — Donald MacKenzie & Yuval Millo, Constructing a Market, Performing Theory, 69 (+2 more)

Related

• Traders made costly unremunerated commitments to build the exchange, resembling collective action. (similarity 0.94)
• Options-exchange founders worked unpaid out of felt obligation to the exchange community (similarity 0.87)
• Building a new market required mobilizing existing exchange members through moral suasion. (similarity 0.86)
• Rational-egoist theory cannot explain why anyone founded the CBOE (similarity 0.85)
• Building financial derivatives exchanges demanded large unpaid, personally costly commitments from organizers (similarity 0.82)
• Pure rational self-interest cannot explain founding a derivatives exchange (similarity 0.80)

Broader Connections

• Building a new market required mobilizing existing exchange members through moral suasion. #corroborates (0.88) — Donald MacKenzie & Yuval Millo, Constructing a Market, Performing Theory, 84
• Options-exchange founders worked unpaid out of felt obligation to the exchange community #corroborates (0.85) — Donald MacKenzie, An Engine, Not a Camera, 677
• Traders made costly unremunerated commitments to build the exchange, resembling collective action. #corroborates (0.80) — Donald MacKenzie & Yuval Millo, Constructing a Market, Performing Theory, 69