A large number of people suffered a small amount of efficiency loss. The number of utils or QALY or whatever metric you want lost was probably fairly substantial.
The line of reasoning “well, no one died” is a classic example of humans’ unfortunate tendency to round small numbers to zero in utilitarian calculations, which leads to all sorts of bad decisions when you’re dealing with things that effect lots of people in small ways.
If you waste 10 seconds of 220 million people's time, which by my calculation adds up to about 70 years, it is not equivalent to depriving one person of their entire life.
That doesn't mean I think anything can't be measured or fit into some sort of framework, I just think there is some fundamental truth in the rounding to zero you refer to, that needs to be accounted for. It's too glib to dismiss it.
The opposite end of the spectrum causes problems too: "It's ok for some people to die, if it results in a small amount of good for a large number of people." One way to look at the problem with that in practice is that small amounts of good and large numbers of people both tend to involve a lot of uncertainty. When we're allowed to do motivated reasoning with enough uncertainty, we can usually prove whatever we want, and that sort of simple utilitarianism ends up being too easy to abuse. I think we can look at cultural taboos as a practical solution to this problem: "Ok, clearly there's no reliable way for us to say what killing is good and what killing is bad, and we all agree that most of it is bad, so let's make the simplifying assumption that all killing is bad."
> A large number of people suffered a small amount of efficiency loss. The number of utils or QALY or whatever metric you want lost was probably fairly substantial.
If the market closing is so bad for its participants, why aren’t they lobbying to keep it open past 4PM? Or on Saturdays?
We can use depository receipts and similar strategies to keep trading 24/7. But the markets would probably be a lot more efficient if they were open all the time. That’s not to say that we (traders) would necessarily make much more money off them that way. We’d probably make less, actually, because it would simplify/remove the kind of arbitrage market opens/closes let us do.
The traders still sleep and stuff. The efficiency loss was time wasted that was scheduled for trading, but not used. It's no different from unexpected downtime in any other job.
I guess I question why exchanges haven't moved toward a highway or hospital model where it's open, unless it really needs to be closed. Those places have the procedures in place to operate after hours.
Or at least adopt the retail model where they get some more retail traders by operating some weeknights/weekends.
FX trading is at least 24/5, there may be venues trading on the weekend but I expect spreads are very wide. CME is open 23/5 already. EUREX has extended their trading hours into the Asia shift in the past few years, I think 20/5. Many other European and Asian derivatives exchanges have extended trading hours over the past decade.
Most equity exchanges are only open or liquid during local business hours. US markets are open longer, but generally illiquid and there are fewer protections outside of "market" hours.
I think for equities, nobody wants to be a market maker 24/7 without a sufficiently wide spread to protect them from news events such as the death of an executive. So even with 24/7 markets you'd probably see very poor conditions outside of core hours. With derivatives, there's more interest in never sleeping. The world is a very interconnected place and less hinges upon a single person's death.
The line of reasoning “well, no one died” is a classic example of humans’ unfortunate tendency to round small numbers to zero in utilitarian calculations, which leads to all sorts of bad decisions when you’re dealing with things that effect lots of people in small ways.