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Phantastic objects and the financial market's sense of reality: a psychoanalytic contribution to the understanding of stock market instability

Tuckett, D; Taffler, R; (2008) Phantastic objects and the financial market's sense of reality: a psychoanalytic contribution to the understanding of stock market instability. The International Journal of Psychoanalysis , 89 (2) pp. 389-412. 10.1111/j.1745-8315.2008.00040.x. Green open access

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Abstract

This paper sets out to explore if standard psychoanalytic thinking based on clinical experience can illuminate instability in financial markets and its widespread human consequences. Buying, holding or selling financial assets in conditions of inherent uncertainty and ambiguity, it is argued, necessarily implies an ambivalent emotional and phantasy relationship to them. Based on the evidence of historical accounts, supplemented by some interviewing, the authors suggest a psychoanalytic approach focusing on unconscious phantasy relationships, states of mind, and unconscious group functioning can explain some outstanding questions about financial bubbles which cannot be explained with mainstream economic theories. The authors also suggest some institutional features of financial markets which may ordinarily increase or decrease the likelihood that financial decisions result from splitting off those thoughts which give rise to painful emotions. Splitting would increase the future risk of financial instability and in this respect the theory with which economic agents in such markets approach their work is important. An interdisciplinary theory recognizing and making possible the integration of emotional experience may be more useful to economic agents than the present mainstream theories which contrast rational and irrational decision-making and model them as making consistent decisions on the basis of reasoning alone.

Type: Article
Title: Phantastic objects and the financial market's sense of reality: a psychoanalytic contribution to the understanding of stock market instability
Open access status: An open access version is available from UCL Discovery
DOI: 10.1111/j.1745-8315.2008.00040.x
Additional information: Imported via OAI, 11:43:49 10th May 2008
UCL classification: UCL
UCL > Provost and Vice Provost Offices
UCL > Provost and Vice Provost Offices > School of Life and Medical Sciences
UCL > Provost and Vice Provost Offices > School of Life and Medical Sciences > Faculty of Brain Sciences
UCL > Provost and Vice Provost Offices > School of Life and Medical Sciences > Faculty of Brain Sciences > Div of Psychology and Lang Sciences
UCL > Provost and Vice Provost Offices > School of Life and Medical Sciences > Faculty of Brain Sciences > Div of Psychology and Lang Sciences > Clinical, Edu and Hlth Psychology
URI: https://discovery.ucl.ac.uk/id/eprint/5465
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