Rational-egoist theory cannot explain why anyone founded the CBOE

Evidence

Of course, avowals of altruism sometimes mask self-interest, but for a rational egoist to embark on a project like the creation of the CBOE, in a context in which all others are rational egoists, is implausible. A riskneutral egoist would need to be confident that the expected personal benefits of the creation of the CBOE exceeded its total costs (others must be expected to free ride, so the founder must expect to bear all these costs); for a risk-averse egoist, the excess might have to be considerable. Given the substantial ex ante uncertainty whether the CBOE would prosper— many opposed it as a likely waste of money—these conditions are unlikely, and our interviews give no suggestion that they were met. — Donald MacKenzie & Yuval Millo, Constructing a Market, Performing Theory, 74

Categorization

• XREF: connects to: Cold rational egoism cannot explain the founding of modern derivatives exchanges — Donald MacKenzie, An Engine, Not a Camera: How Financial…, 678; Pure rational self-interest cannot explain founding a derivatives exchange; By the late 1990s the CBOE trading floor was so computerized it self-heated — Donald MacKenzie, An Engine, Not a Camera: How Financial…, 898 (+2 more)

Broader Connections

• Cold rational egoism cannot explain the founding of modern derivatives exchanges #corroborates (0.97) — Donald MacKenzie, An Engine, Not a Camera, 678
• Pure rational self-interest cannot explain founding a derivatives exchange #corroborates (0.95)
• Creating the CBOE required costly unpaid collective effort by exchange members #corroborates (0.95) — Donald MacKenzie & Yuval Millo, Constructing a Market, Performing Theory, 69
• Baker’s anonymous network-study exchange was actually the CBOE. #expands (0.80) — Donald MacKenzie & Yuval Millo, Constructing a Market, Performing Theory, 51
• By the late 1990s the CBOE trading floor was so computerized it self-heated #complicates (0.75) — Donald MacKenzie, An Engine, Not a Camera, 898