Jens Beckert

THE PRICE OF ART: Uncertainty and reputation in the art field

ABSTRACT How do prices for contemporary art come into being? Buyers of contemporary art face a problem of fundamental uncertainty, because what passes as quality is difficult to determine, and buyers can hardly estimate how a specific piece of art will perform as an investment. Since a market for contemporary art presupposes the possibility of at least limited rational purchasing decisions, uncertainty must be reduced. We argue that the value of an art work or artist originates in an intersubjective process of assessment and conferring of reputation by experts in the art field, such as gallery owners, curators, critics, art dealers, journalists, and collectors, who help establish the artistic reputation of a work or an artist. The quality signals emerging from the art field enable buyers to assess the economic value of art works. We tested this initial hypothesis against two datasets containing data on art prices and information from the biographies of artists.

What is sociological about economic sociology? Uncertainty and the embeddedness of economic action

ConclusionThis article argues that the problem of uncertainty represents the central limitation of efficiency-based approaches to the explanation and prediction of economic outcomes. The problem of uncertainty reintroduces the Hobbesian problem of order into economics and makes it possible to connect questions of economic decision-making with social theory. The emphasis lies not, as in the behavioral theories of the Carnegie School, in the influence of uncertainty on the actual decision process, but in those social “devices” that actors rely on in decision-making, i.e., that structure the situation for the agents. If agents cannot anticipate the benefits of an investment, optimizing decisions become impossible, and the question opens up how intentionally rational actors reach decisions under this condition of uncertainty. This provides a systematic starting point for economic sociology. Studies in economic sociology that argue from different theoretical perspectives point to the significance of uncertainty and goal ambiguity. This contribution reflects theoretically why economic sociology can develop a promising approach by building upon these insights. It becomes understandable why culture, power, institutions, social structures, and cognitive processes are important in modern market economies. But it should be equally emphasized that the maximizing paradigm in economics will not be dethroned without a causal theory of the relationship of intentional rationality and social rigidities.

Economic Sociology and Embeddedness: How Shall We Conceptualize Economic Action?

One of the most persistent themes within economic sociology has been the critical assessment of economics. More precisely, economic sociology finds a unifying denominator in its critique of modeling strategies which proceed from the notion of homo economicus acting in a world with full information, independent decision making, polypolistic competition, transitivity, and fixed preferences. Sociologists have commonly observed that actual economic decision making does not fit this model (Luhmann 1968; Weber 1985; Etzioni 1988). Over the last fifteen years, the notion of em-beddedness has served as the crucial counter-concept used by economic sociologists to mark a distinctive approach to the understanding of economic processes (Granovetter 1985; Zukin and DiMaggio 1990). Embeddedness refers to the social, cultural, political, and cognitive structuration of decisions in economic contexts. It points to the indissoluble connection of the actor with his or her social surrounding. It has been given little notice, however, that the critique of the economic model of action on one hand and the sociological concept of embeddedness on the other are situated on two different conceptual levels. While the former refers to the question of how to conceive of the structure of action, the latter tells us about external variables which influence the action process and outcome. If this observation is correct, it is not surprising that the unfolding of the notion of embeddedness did not lead to much theoretical progress in the development of a theory of action which could provide an alternative to

Institutional Isomorphism Revisited: Convergence and Divergence in Institutional Change

Under the influence of groundbreaking work by John Meyer and Brian Rowen, as well as Paul DiMaggio and Walter Powell, over the last 30 years research in the new sociological institutionalism has focused on processes of isomorphism. I argue that this is a one-sided focus that leaves out many insights from other institutional and macrosociological approaches and does not do justice to actual social change because it overlooks the role played by divergent institutional development. While the suggestion of divergent trends is not new, there have been few attempts to integrate divergence into the theoretical premises of the new sociological institutionalism. Based on the typology proposed by DiMaggio and Powell, I show that the mechanisms identified by them as sources of isomorphic change can support processes of divergent change as well. The theoretical challenge is to identify conditions under which these mechanisms push institutional change toward homogenization or divergence.

The Great Transformation of Embeddedness: Karl Polanyi and the New Economic Sociology

I argue that in its adaptation from Karl Polanyis The Great Transformation, the concept of embeddedness has itself undergone a great transformation. In the process, significant meanings of the concept have vanished, while others have been added. First I explore the different meanings the concept of embeddedness has achieved in the new economic sociology. Then I argue that it is not the embeddedness of economic action that should constitute the vantage point of economic sociology, but rather three coordination problems that actors face in economic exchange: the valuation of goods, competition and the problem of cooperation deriving from the social risks of exchange. I show that by proceeding from these coordination problems economic sociology, economic anthropology and economic history can find common research questions which allow them to enter into dialogue with each other more systematically. In the next section I focus on the social-reformist inclinations of Polanyis use of the notion of embeddedness and thereby highlight a challenge posed in The Great Transformation that was largely not taken up by economic sociologists. Finally, I discuss limitations for developing a macro theory of the economy that result from making embeddedness the core concept of economic sociology.

Was ist soziologisch an der Wirtschaftssoziologie? Ungewißheit und die Einbettung wirtschaftlichen Handelns

Zusammenfassung Insbesondere in den USA hat sich die Wirtschaftssoziologie während der letzten fünfzehn Jahre zu einem herausragenden Forschungsgebiet innerhalb der Soziologie entwickelt. Der Beitrag fragt nach einem theoretischen Ausgangspunkt für die Wirtschaftssoziologie in Abgrenzung zur ökonomischen Theorie. Das Problem der Ungewißheit erweist sich als zentrale Grenze für wirtschaftswissenschaftliche Ansätze, die von der Annahme des Maximierungshandelns von Akteuren ausgehen. Der hier vorgeschlagene Ansatz der Wirtschaftssoziologie stellt nicht die Handlungsmotive der Akteure in den Vordergrund, sondern vielmehr die Struktur der Handlungssituation. Durch Ungewißheit wird das Ordnungsproblem wieder in die Ökonomie eingebracht und es läßt sich die Frage stellen: ’Wie handeln intentional rationale Akteure, wenn sie nicht wissen, durch welche Alternativenwahl sie ihren Nutzen maximieren können?’ Mit der Verbindung von Ungewißheit mit dem Problem sozialer Ordnung kann ein systematischer Anschluß der Wirtschaftssoziologie an die soziologische Theorie hergestellt werden.

Why the Poor Play the Lottery: Sociological Approaches to Explaining Class-based Lottery Play

Why do the poor spend more on lottery tickets than their wealthier and better educated peers? While social scientists generally agree that there is an inverse relationship between socio-economic position and patterns of lottery play, there is debate on what factors cause lottery gambling. Using survey data from a nationwide probability sample, we test three sociological approaches – socio-structural, cultural and social network accounts – to explain why the poor play the lottery. While controlling for cognitive bias theory, we find that peer play, educational attainment and self-perceived social deprivation have strong effects on lottery play. Culture, the study finds, plays a much lesser role. Although lottery players demonstrate fatalistic value orientations, it is not a lack of a ‘Protestant’ work ethic that makes the poor spend proportionally more on lottery tickets. The findings of this study generally point to the importance of social structures in explaining lottery gambling.

Capitalism as a System of Expectations Toward a Sociological Microfoundation of Political Economy

Political economy and economic sociology have developed in relative isolation from each other. While political economy focuses largely on macro phenomena, economic sociology focuses on the embeddedness of economic action. The article argues that economic sociology can provide a microfoundation for political economy beyond rational actor theory and behavioral economics. At the same time political economy offers a unifying research framework for economic sociology with its focus on the explanation of capitalist dynamics. The sociological microfoundation for understanding of capitalist dynamics should focus on the expectations actors have regarding future states of the world. Based on a discussion of what I call the four Cs of capitalism (credit, commodification, creativity, and competition), I argue that under conditions of uncertainty, expectations are contingent and should be understood as “fictional expectations.” The capability of humans to imagine future states of the world that can be different from the present is the central basis for a sociological microfoundation of the dynamics of economic macro phenomena. Macroeconomic dynamics are anchored in these “fictional expectations,” which create motifs for engaging in potentially profitable but ultimately incalculable outcomes. This shifts attention to the “management of expectations” as a crucial element of economic activity and to the institutional, political, and cultural foundations of expectations. The reproduction of capitalism is precarious also because of the contingency of expectations conducive to its growth.

Wirtschaftssoziologie als Gesellschaftstheorie

Zusammenfassung Der Artikel thematisiert das Verhältnis von Gesellschaftstheorie und Wirtschaftssoziologie anhand von zwei Thesen. Zunächst wird im ersten Teil argumentiert, dass gesellschaftlicher Wandel in kapitalistischen Gesellschaften seinen Ausgangspunkt wesentlich in der Dynamik der Wirtschaft hat und dem Wirtschaftssystem daher ein Primat für die Erklärung von Gesellschaftsentwicklung zukommt. Zugleich stößt die Verwertungslogik der geldgesteuerten Ökonomie auf eine politische und soziale Widerständigkeit, die der Subsumierung der gesellschaftlichen Ordnung unter ökonomische Prinzipien entgegensteht. Aus einer konflikttheoretischen Perspektive wird argumentiert, dass die konkrete Organisation der kapitalistischen Wirtschaft nur von den sozialen und politischen Auseinandersetzungen um ihre Institutionalisierung her verstanden werden kann. Im zweiten Teil des Artikels werden die Konsequenzen dieser gesellschaftstheoretischen Konzeptualisierung für die wirtschaftssoziologische Forschung diskutiert. Die Wirtschaftssoziologie beschränkt sich nicht darauf, die soziale Kontextualisierung wirtschaftlichen Handelns aufzuzeigen, sondern muss die Einbettung wirtschaftlichen Handelns in den systematischen Zusammenhang historischer Entwicklungsprozesse stellen und damit die Entstehung von spezifischen Formen der Einbettung aus den Konflikten im Feld der Wirtschaft verstehend erklären. Summary This article discusses the relation between social theory and economic sociology based on two theses. In the first part I argue that social change in capitalist societies has its starting point primarily in the dynamics of the economy. Consequently, the economic system predominates in explanations of societal development. At the same time the economic logic is confronted by political and social resistance that prevents social order from being subsumed by economic imperatives. I argue from a conflict-theoretical perspective that the actual organization of the capitalist economy can only be understood based on social and political conflicts over its institutional form. In the second part I discuss the consequences of this conceptualization of social dynamics for economic sociology. I argue that economic sociology is not limited to showing the social contextualization of economic action as such, but needs to demonstrate a systematic connection between the embeddedness of economic action and historical developments. The specific forms which embeddedness might take are explained on the basis of conflicts observed in the economic sphere.

Trust and the Performative Construction of Markets

The concept of trust has recently been rediscovered, especially in the fields of economic sociology and organization theory. Nevertheless, the actual functioning of trust in markets has only been understood incompletely up to now. As this paper argues, one reason for this is that conceptualizations of trust have focused primarily on the decision-making process of the trust-giver. The contribution of the trust-taker, however, has not been comprehensively investigated. I propose understanding trust as a tranquilizer in market relations that is partly produced in the situation itself by the performative acts of self-presentation of the trust-taker. On the basis of a taxonomy of four strategies, the final part of the paper demonstrates the consequences that result for the understanding of the functioning of markets from this conceptualization of trust relations.