Journal Article

Against all odds: the ‘loyalty’ of small investors<sup>†</sup>

Uwe Schimank

in Socio-Economic Review

Published on behalf of Society for the Advancement of Socio-Economics

Volume 9, issue 1, pages 107-135
Published in print January 2011 | ISSN: 1475-1461
Published online October 2010 | e-ISSN: 1475-147X | DOI: http://dx.doi.org/10.1093/ser/mwq023
Against all odds: the ‘loyalty’ of small investors†

More Like This

Show all results sharing these subjects:

  • Moral Philosophy
  • Corporate Social Responsibility
  • Welfare Economics
  • Political Economy
  • Economic Sociology

GO

Show Summary Details

Preview

The share of small investors leaving the financial market in autumn 2008 was no greater than in previous, smaller crises. Why is there no mass exodus at such junctures? Why do most small investors practice ‘loyalty’ instead of ‘exit’ (Hirschman)? Even more importantly, why do they enter the financial market at all since its ‘hypercomplexity’ exposes them to an experience of confusion and helplessness? Behavioural economics provides some partial answers, but they remain too abstract and ahistorical and give a very reductionist picture of decision-making. In reaction to this incomplete understanding of the ‘loyalty’ puzzle, I will present two important explanatory factors from sociological reasoning: collectively shared stories as reducers of ‘hypercomplexity’ in which small investors’ decision-making is embedded, and the rebuilding of the welfare state, which forces more and more people to become small investors and stay in the market despite serious losses.

Keywords: capitalism; economic man; financial crisis; financial market; investment banking; G2 financial institutions and services; P1 capitalist systems; Z1 economic sociology

Journal Article.  12501 words. 

Subjects: Moral Philosophy ; Corporate Social Responsibility ; Welfare Economics ; Political Economy ; Economic Sociology

Full text: subscription required

How to subscribe Recommend to my Librarian

Users without a subscription are not able to see the full content. Please, subscribe or login to access all content.