Marco Castellani

Reflexivity and socio-cognitive dynamics in the development of financial markets: an explanatory framework proposal

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The article presents a theoretical analysis on the socio-cognitive processes that are supposed to play an essential role in the evolution of financial markets and in their dynamic since the eruption of the 2008 crisis. Two levels are examined starting from the studies carried out by George Soros about reflexivity and concerning the intersubjective sphere of human behavior. The first one refers to the way by which agents build up cognitive representations that affect their capability of anticipating events, while the second one is linked to the transition from these representations to certain mental states, above all beliefs about future occurrence and intentional action plans. Some explanatory hypotheses are made to shed light on the interplay between the two levels when economic and financial ill-structured scenarios occur. The crucial topic here investigated is the mechanism of analogy that is at work when agents cannot make reasonable inferences in high uncertainty conditions. By elaborating some key notions of Alfred Schutz and Douglas Hofstadter's standpoints, the article discusses the core properties of fluid concepts and creative analogies as the mechanisms that help develop forethought, sensemaking and self-organizing attitude.


  • Reflexivity
  • Belief System
  • Cognitive Representation
  • Provinces of Meaning
  • Fluid Analogies


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