I have just read an interesting article by Epsen Haug and Nicholas Taleb in the Journal of Economic Behaviour and Organization. The working paper can be found here. They make the following somewhat controversial arguments in their paper:
1. Black, Scholes and Merton did not invent any formula - they just took an existing formula and made it compatible with neoclassical economics.
2. Option trading was a lot more developed and sophisticated prior to the development of the Black-Scholes-Merton model than we previously realised.
3. Option traders did not use the Black-Scholes-Merton formula after 1973. Instead, they continued to use their bottom-up heuristics which are more robust to high impact rare events.
4. The growth of the options market is not due to the Black-Scholes-Merton formula, but the development of computers with powerful processors.
5. Option traders use heuristics which are close to the Bachelier and Thorp approach to option valuation.