The Institutionalization and Performative Properties of Financial Algorithms

This article explores the complex socio-economic implications of the influence of financial algorithmic systems upon the market landscape. The integration of these algorithms into industry has led to significant changes, and the computational processes they trigger shape the dynamics of today's market. To further advance financial algorithms, it is necessary to develop not only technological innovations but also new approaches and frameworks for studying them and determining their place within economic system. Three modes of financial algorithm development were analyzed for this purpose. The first mode involved dismantling traditional financial structures to establish a new financial and algorithm-driven order. The second mode focused on the performative functions of these algorithms, while the third explored the institutionalization of financial algorithms in the market. At the same time, there is a continuous comparison of traditional finance and algorithmic finance, considering their common features and differences, as well as analyzing the impact of financial algorithms on both financial and non-financial sectors. Evolutionary methods and institutional theory methods are used. The article concludes that the institutionalization of algorithms formalizes new artificial market structures, giving them a specific identity and legitimacy.