Gradual market learning is the rival explanation to performativity

Evidence

However, perhaps the Black-Scholes-Merton model succeeded because it was simply the right way to price options, but market participants learned that only slowly, with their markets only gradually becoming efficient? If that were so, “Barnesian performativity” would be an empty gloss on a process that could better be described in simpler, more conventional terms. — Donald MacKenzie, An Engine, Not a Camera, 149

Categorization

• QUESTION: This is the crux alternative hypothesis Mackenzie must defeat — worth tracking how chapter 7’s evidence bears on it.
• XREF: connects to: Option pricing theory serves as the test case for performativity. — Donald MacKenzie, An Engine, Not a Camera: How Financial…, 124; A market model can shape markets actively rather than merely describing them — Donald MacKenzie, An Engine, Not a Camera: How Financial…, 1165

Broader Connections

• A market model can shape markets actively rather than merely describing them #contradicts (0.85) — Donald MacKenzie, An Engine, Not a Camera, 1165