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Reciprocity as a Foundation of Financial Economics

This paper argues that the subsistence of the fundamental theorem of contemporary financial mathematics is the ethical concept ‘reciprocity’. The argument is based on identifying an equivalence between the contemporary, and ostensibly ‘value neutral’, Fundamental Theory of Asset Pricing with theorie...

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Autor principal: Johnson, Timothy C.
Formato: Online Artículo Texto
Lenguaje:English
Publicado: Springer Netherlands 2014
Materias:
Acceso en línea:https://www.ncbi.nlm.nih.gov/pmc/articles/PMC4581401/
https://www.ncbi.nlm.nih.gov/pubmed/26430288
http://dx.doi.org/10.1007/s10551-014-2257-x
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author Johnson, Timothy C.
author_facet Johnson, Timothy C.
author_sort Johnson, Timothy C.
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description This paper argues that the subsistence of the fundamental theorem of contemporary financial mathematics is the ethical concept ‘reciprocity’. The argument is based on identifying an equivalence between the contemporary, and ostensibly ‘value neutral’, Fundamental Theory of Asset Pricing with theories of mathematical probability that emerged in the seventeenth century in the context of the ethical assessment of commercial contracts in a framework of Aristotelian ethics. This observation, the main claim of the paper, is justified on the basis of results from the Ultimatum Game and is analysed within a framework of Pragmatic philosophy. The analysis leads to the explanatory hypothesis that markets are centres of communicative action with reciprocity as a rule of discourse. The purpose of the paper is to reorientate financial economics to emphasise the objectives of cooperation and social cohesion and to this end, we offer specific policy advice.
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spelling pubmed-45814012015-09-29 Reciprocity as a Foundation of Financial Economics Johnson, Timothy C. J Bus Ethics Article This paper argues that the subsistence of the fundamental theorem of contemporary financial mathematics is the ethical concept ‘reciprocity’. The argument is based on identifying an equivalence between the contemporary, and ostensibly ‘value neutral’, Fundamental Theory of Asset Pricing with theories of mathematical probability that emerged in the seventeenth century in the context of the ethical assessment of commercial contracts in a framework of Aristotelian ethics. This observation, the main claim of the paper, is justified on the basis of results from the Ultimatum Game and is analysed within a framework of Pragmatic philosophy. The analysis leads to the explanatory hypothesis that markets are centres of communicative action with reciprocity as a rule of discourse. The purpose of the paper is to reorientate financial economics to emphasise the objectives of cooperation and social cohesion and to this end, we offer specific policy advice. Springer Netherlands 2014-07-06 2015 /pmc/articles/PMC4581401/ /pubmed/26430288 http://dx.doi.org/10.1007/s10551-014-2257-x Text en © The Author(s) 2014 https://creativecommons.org/licenses/by/4.0/ Open AccessThis article is distributed under the terms of the Creative Commons Attribution License which permits any use, distribution, and reproduction in any medium, provided the original author(s) and the source are credited.
spellingShingle Article
Johnson, Timothy C.
Reciprocity as a Foundation of Financial Economics
title Reciprocity as a Foundation of Financial Economics
title_full Reciprocity as a Foundation of Financial Economics
title_fullStr Reciprocity as a Foundation of Financial Economics
title_full_unstemmed Reciprocity as a Foundation of Financial Economics
title_short Reciprocity as a Foundation of Financial Economics
title_sort reciprocity as a foundation of financial economics
topic Article
url https://www.ncbi.nlm.nih.gov/pmc/articles/PMC4581401/
https://www.ncbi.nlm.nih.gov/pubmed/26430288
http://dx.doi.org/10.1007/s10551-014-2257-x
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