Millo, Yuval and Schinckus, Christophe (2016) A nuanced perspective on episteme and techne in finance. International Review of Financial Analysis, 46 . pp. 124-130. doi:10.1016/j.irfa.2016.04.001 ISSN 1057-5219.

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Abstract

The debates on the Black and Scholes model shed light on the distinction between practices (i.e. inductive know-how or techne) and theory (i.e. deductive know-why or episteme) in finance. We revisit the classical distinction, still accepted widely in the literature, between episteme and techne and develop a nuanced view by introducing two other levels of knowledge we will call “commanding knowledge” (epitaktike) and “practical wisdom” (phronesis). The major contribution of this paper is to use these four levels of knowledge (episteme, epitaktike, techne and phronesis) in order to highlight how this model subtly influenced financial practices by shaping the microstructure of the emerging Chicago Board Options Exchange (CBOE). Our analysis will then be completed by a re-interpretation of the existing literature about the performativity of the BSM model to show how these levels of knowledge combined each other in the evolution post-crash (1987) financial practices

Item Type:	Journal Article
Divisions:	Faculty of Social Sciences > Warwick Business School > Global Energy Faculty of Social Sciences > Warwick Business School
Journal or Publication Title:	International Review of Financial Analysis
Publisher:	Elsevier BV
ISSN:	1057-5219
Official Date:	July 2016
Dates:	Date Event July 2016 Published 9 April 2016 Available 1 April 2016 Accepted
Volume:	46
Page Range:	pp. 124-130
DOI:	10.1016/j.irfa.2016.04.001
Status:	Peer Reviewed
Publication Status:	Published
Access rights to Published version:	Restricted or Subscription Access

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