Papers presented by David Sicilia since 2019
2024 Providence, Rhode Island
"When Theory Collided With Financial Markets: The Saga of Paul Samuelson and Commodities Corporation "
Fernando Chaddad, Cepheid Research, Inc.
David Sicilia, University of Maryland
Abstract:
Paul Samuelson is widely regarded as (per his leading biographer) “the founder of modern economics,” and for decades his college textbook dominated Western higher education economics pedagogy. But off the public stage, Samuelson the investor/consultant suffered a remarkable setback in the 1970s. Based on deep research into a variety of hitherto unmined archival sources, this paper documents the saga of the great economist and one of the first quantitatively driven trading organizations he co-founded: Commodities Corporation (CC; 1970-1997). Act 1: In 1970, a group of PhD economists from MIT and other top universities left academia to launch CC, a talent incubator where many future hedge fund stars first shone. One of the original CC backers, Samuelson had been co-creator of the efficient market hypothesis (EMH) – that superior fundamental analysis may lead to superior returns in efficient markets, whereas technical analysis may not. Act II: Guided by EMH, CC engaged in a series of trades in 1971 so disastrous they nearly bankrupted the company. Act III: CC promptly pivoted to trend following, a disarmingly simple technique that signals traders when to buy or short an asset based solely on its price trend. Ironically – according to EMH architects Samuelson, Eugene Fama, and others – price trends do not exist. Along with Samuelson revisionism, this case study holds broader implications about the place of efficient market-oriented theory, especially EMH, in the behavior of financial markets. The research draws on several Commodities Corporation (CC) sources including the Paul Samuelson archival collection at the David M. Rubenstein Rare Book & Manuscript Library at Duke University, which includes a collection of Samuelson’s personal letters on CC as well as unpublished interviews and lectures.
2023 Detroit, MI, United States
""
David Sicilia, University of Maryland College Park
Abstract:
tba
Keywords:
2020 Charlotte, North Carolina
"Human Collaboration: Insights from Evolutionary Biology and Anthropology for Business History"
David Sicilia, University of Maryland
Abstract:
In recent decades, several of the human sciences have fundamentally revised our understanding of human nature and human behavior, including issues related to selfishness, altruism, and cooperation. (As BHC members know, cognitive psychology helped launch behavioral economics, which in turn has challenged to homo economicus). In this exploratory essay, I survey key developments in recent evolutionary biology and anthropology related to human cooperation and their implications for business history. Evolutionary theory seemed to leave no room for “altruism” – defined as generous acts without expectation of reciprocity toward non-relatives – because they did not promote genetic fitness. This individualistic model – exemplified by Richard Dawkin’s book The Selfish Gene (1976) – has been challenged by newer models of “group survival” that appear to resolve the altruism conundrum (e.g. Elliott Sober and David Wilson, Unto Others [1999]; and Christopher Boehm, Moral Origins, [2012]). Group cooperation more than individual striving has emerged as a core survival trait, with humans developing elaborate mechanisms for monitoring, communicating, and enforcing group-oriented goals. Homo sapiens developed varieties of such norms, expectations, and routines within small, face-to-face (mostly hunting and gathering) communities over millennia, while regularly confronting foreign, rival tribes. In-group cooperation, competition, and exchange have been fundamentally different from out-group relationship, parallel to the communalistic (gift and barter) versus formalized (capitalist) modes of exchange in modern society. Long-evolved human propensities to cooperate and compete in particular ways point to ways that business organizations can effectively define employee team sizes, rules, and routines. In the final portion of the essay, I consider examples suggested by common social patterns related to gift reciprocity, bullying, free riding, and hierarchical fluidity.