Long-Term Capital Management and the sociology of arbitrage

@article{MacKenzie2003LongTermCM,
  title={Long-Term Capital Management and the sociology of arbitrage},
  author={Donald MacKenzie},
  journal={Economy and Society},
  year={2003},
  volume={32},
  pages={349 - 380}
}
  • D. MacKenzie
  • Published 1 January 2003
  • Economics
  • Economy and Society
Arbitrage is a key process in the practice of financial markets and in their theoretical depiction: it allows markets to be posited as efficient without all investors being assumed to be rational. This article explores the sociology of arbitrage by means of an examination of the arbitrageurs, Long-Term Capital Management (LTCM). LTCM's 1998 crisis is analysed using both qualitative, interview-based data and quantitative examination of price movements. It is suggested that the roots of the… Expand
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