Financial models as artefacts: performativity, representation, and the many lives of the Black–Scholes–Merton model

The notion that financial models are ‘performative’ has proven a decisive influence on the critical finance literature’s understanding of the relationship between models and market infrastructures. This article re-examines how the ‘performative turn’ has been articulated in the critical finance literature, identifying a tension between the literature’s application of the ‘performativity of financial modelling’ thesis advanced by Donald MacKenzie, and the pragmatic theoretical foundations of the ‘performative turn’ writ large. I argue, in particular, that MacKenzie’s account of ‘performation’ has been read in a way which projects a reductive picture of how models are constructed and deployed. To build on MacKenzie’s account and sharpen our understanding of his notion of performation, I argue, requires an ‘artefactual’ understanding of models which draws attention to the way in which models are ‘moulded’ together as they are constructed, and the creative processes by which they are deployed in the practical world of finance. This perspective, I suggest, enriches existing approaches by drawing attention to both the substantive modalities of sociotechnical agencement and the ‘micropolitics’ operative within this process. Using the Black–Scholes–Merton model of options pricing as illustration, I show how models live ‘many lives’ as they are creatively drawn on, deployed, and repurposed.