Economic action as distributed cognition is what makes embedded theory genuinely performative.

Evidence

The answer, it seems to us, must involve both impoverishing and enriching conventional economic views of the rational actor. A necessary impoverishment is the acknowledgment of humans’ limited information-processing and calculational capacity and thus the recognition that a key role is played by simplifying concepts such as “implied volatility” and material means of calculation such as Black’s sheets or Autoquote. That concepts and material means are constitutive of economic action—that economic action is distributed cognition in the sense of Hutchins (1995)—implies that the economic theory crystalized in concepts and devices can indeed be performative, even if not (as emphasized above) in any simple sense of selffulfilling prophecy, but as the outcome of a conflictual, embedded process. — Donald MacKenzie & Yuval Millo, Constructing a Market, Performing Theory, 200

Categorization

• QUESTION: This puts a precise mechanism behind performativity — theory crystallized in devices and concepts — worth tracking against later performativity debates (Callon, MacKenzie).
• XREF: Directly serves the stated reading purpose: performativity in finance theory. Connects to Callon, MacKenzie, and Hutchins’ distributed cognition. — connects to: Economic theory embodied in devices performs and creates its own posited phenomena. — Donald MacKenzie, An Engine, Not a Camera: How Financial…, 1196; Markets act as cognitive prostheses enabling outcomes beyond individual rationality — Donald MacKenzie, An Engine, Not a Camera: How Financial…, 1206; Economic concepts actively constitute the economic behavior they describe — Anthony Giddens, The Consequences of Modernity, 105 (+1 more)
• DEEPTHINKING: The move distinguishing performativity from self-fulfilling prophecy via embedded, conflictual process is the core analytic payoff of the whole article.

Related

• Economic theory embodied in devices performs and creates its own posited phenomena. (similarity 0.90)
• Economic performativity rests on human cognitive limits and mutual susceptibility (similarity 0.87)
• Economics operates through material devices and algorithms as much as beliefs. (similarity 0.87)
• Studying performativity forces attention to the very market objects economics analyzes. (similarity 0.85)
• Implied volatility concepts and calculation devices are constitutive of economic action (similarity 0.85)
• Economics is generically performative when real-world actors actually use it. (similarity 0.84)
• Performativity analysis complements rather than replaces economic sociology’s embedding approach (similarity 0.83)
• Markets act as cognitive prostheses enabling outcomes beyond individual rationality (similarity 0.83)
• Economics is effectively performative only when using it changes market outcomes. (similarity 0.83)
• Performativity claims must be distinguished from the market merely converging on a correct theory. (similarity 0.82)
• Economics simplifies and disembeds market participants to become applicable. (similarity 0.81)
• A market model can shape markets actively rather than merely describing them (similarity 0.81)
• Human cognitive limits make simplifying concepts and calculating devices constitutive of complex markets. (similarity 0.81)
• Financial economics actively alters markets rather than merely describing them (similarity 0.80)
• Efficient-market theory generates the trades that consume its own counterevidence. (similarity 0.80)

Broader Connections

• Economic theory embodied in devices performs and creates its own posited phenomena. #expands (0.92) — Donald MacKenzie, An Engine, Not a Camera, 1196
• Economic concepts actively constitute the economic behavior they describe #corroborates (0.85) — Anthony Giddens, The Consequences of Modernity, 105
• Markets act as cognitive prostheses enabling outcomes beyond individual rationality #expands (0.75) — Donald MacKenzie, An Engine, Not a Camera, 1206
• Economic performativity rests on human cognitive limits and mutual susceptibility #complicates (0.72) — Donald MacKenzie, An Engine, Not a Camera, 1197