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Lynette A. Shaw (2020)The Journal of Mathematical Sociology, 44:2, pp. 65-89 Abstract. This article develops a formalism for the social construction of value. Using a model based on Bayesian agents, it demonstrates how “something” arises out of “nothing” via the emergence of durable value conventions and shows how the developed framework can be used to investigate socially constructed valuations under a variety of circumstances. The resulting analysis clarifies why assumptions that collectives will converge upon the “intrinsic” (i.e., non-socially originating) value of an object (e.g., market efficiency) may not hold for mixed social and non-social valuation regimes, explains the dependency of socially constructed valuations on early accidents, demonstrates the effects of confident actors on constructed values, and identifies the production of time-dependent ratcheting effects from the interaction of bubbles with value conventions."After reviewing the central features of realist and constructionist approaches to value, this article articulates a common basis for both paradigms in their mutual admittance of individual valuation being a process of learning under conditions of initial uncertainty. The next section then shows how this microfoundation (Coleman, 1990; Hedström &#38; Swedberg, 1998) can be readily translated into a parsimonious and generative computational model based on Bayesian updating agents (Epstein, 2006; Hedström &#38; Ylikoski, 2010; Macy &#38; Willer, 2002) that captures the emergent dynamics of socially constructed valuations under a wide range of conditions. The first, central result of this modeling approach will be a demonstration of how socially originating value, rather than being an innately transient or irrational phenomenon, easily achieves the status of a real “social fact” (Durkheim, 1966) or value convention (Biggart &#38; Beamish, 2003; Boyer &#38; Orléan, 1992; Lewis, 1969; Young, 1993) characterized by a durability and stability that resembles non-socially originating valuations. Building from this baseline, the model then clarifies how mixtures of realist and constructionist valuations combine in non-trivial ways that strongly impede a system’s ability to arrive at a collective estimation of an object’s worth that aligns with its non-socially originating value (i.e., what might be characterized as its “intrinsic” or “fundamental” value in certain perspectives). The final set of modeling results considered then show how this basic model of socially constructed value can be readily extended to systematically explore a variety of other substantively important scenarios in the social construction of value. Among these are a formal clarification of the high dependency of socially constructed valuations on initial conditions, a demonstration of the susceptibility of socially constructed valuations to the influence of highly confident through initially incorrect early actors, and an account for the emergence of “ratcheting effects” in constructed valuations via a fossilization of earlier periods of panics or exuberance within collective memory." (p. 65-66)Link to the review