A Realist Approach To Financial Markets

The primary objective of the present thesis is the formulation of a first outline of an alternative conceptualisation of the expectation formation process of stock market (securities) traders, with a view toward a more comprehensive project, which aims at the conceptualisation of the generalizable aspects of cognition applying to financial markets as a whole – an argument that no single thesis would suffice to develop and defend –, to be endeavoured in the future as a preliminary toward a more appropriate scientific approach to the study of financial market processes, one capable of overcoming the impasse of modern mainstream finance research that shall be established as part of the present analysis. The core contributions of the present work shall be the following: First, the exposure of the deep embeddedness of the conceptualisation of the agent in mainstream finance in general neoclassical economics at the level of ontology, methodology and use of methods, as well as its untenability within the context of financial market research; secondly, the outline of a more plausible conceptualisation of the stock market operator’s expectation formation process; thirdly, the exposition of the inherent strengths and weaknesses of existing alternative accounts within the wider economics literature with respect to their ability to cater for the requirements that an alternative approach to financial market research in the light of the established ontological and conceptual insights demands; and fourthly, the identification of a suitable methodological approach for transforming the projected re-conceptualisation of financial market processes in terms of processes of cognition, once realized, into a viable scientific research enterprise.