Abstract
Following the bankruptcy of Lehman Brothers, world financial markets went through a period of economic anarchy in the latter half of 2008. Particularly in October 2008, many world stock exchanges introduced circuit breakers and frequently changed rules for implementing them. In the viewpoint of those who emphasize autonomy and efficiency of markets, these rule changes must be incomprehensible. In order to understand the institutional changes in stock markets, we introduce “replicator” and “interactor” which are key concepts of institutional and economical evolution. We show that market mechanisms such as circuit breakers were formed through evolutionary dynamics motivated by environmental changes in addition to economic efficiency. We maintain that the concepts of replicator and interactor help in understanding institutional evolution.
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Research fellow of the Japan Society for the Promotion of Science (JSPS).
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Kobayashi, S., Hashimoto, T. Analysis of Institutional Evolution in Circuit Breakers Using the Concepts of Replicator and Interactor. Evolut Inst Econ Rev 7, 101–111 (2010). https://doi.org/10.14441/eier.7.101
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DOI: https://doi.org/10.14441/eier.7.101