Investment decision making from a constructivist perspective

Investment decision making from a constructivist perspective Purpose – This paper aims to introduce the reader to investigate some aspects of investment decision making from a constructivist perspective. Design/methodology/approach – The constructivist perspective is introduced in its dual nature of epistemology and of modelization. From constructivist epistemology, the paper mentions the corollaries of theoretical pluralism and cognitive pragmatism. From Kruglanski and Ajzen's Lay epistemology theory, the paper presents in more detail a constructivist modelization for the study and improvement of formal processes of investment decision making. Findings – Beginning from the proposed framework, the paper indicates the lines for the development of a critical (or reflective) investment decision‐making attitude. This is an investment decision making which is able to reflect on its own constructs and cognitive processes in order to develop investment processes with a higher “constructivist awareness” and efficacy. Originality/value – The proposed modelization can contribute to the work of those dedicated to the development of better formal processes of investment. The paper presents three examples of possible applications potentially useful for the improvement of the processes of asset valuation of value investors. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Qualitative Research in Financial Markets Emerald Publishing

Investment decision making from a constructivist perspective

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Publisher
Emerald Publishing
Copyright
Copyright © 2011 Emerald Group Publishing Limited. All rights reserved.
ISSN
1755-4179
DOI
10.1108/17554171111176895
Publisher site
See Article on Publisher Site

Abstract

Purpose – This paper aims to introduce the reader to investigate some aspects of investment decision making from a constructivist perspective. Design/methodology/approach – The constructivist perspective is introduced in its dual nature of epistemology and of modelization. From constructivist epistemology, the paper mentions the corollaries of theoretical pluralism and cognitive pragmatism. From Kruglanski and Ajzen's Lay epistemology theory, the paper presents in more detail a constructivist modelization for the study and improvement of formal processes of investment decision making. Findings – Beginning from the proposed framework, the paper indicates the lines for the development of a critical (or reflective) investment decision‐making attitude. This is an investment decision making which is able to reflect on its own constructs and cognitive processes in order to develop investment processes with a higher “constructivist awareness” and efficacy. Originality/value – The proposed modelization can contribute to the work of those dedicated to the development of better formal processes of investment. The paper presents three examples of possible applications potentially useful for the improvement of the processes of asset valuation of value investors.

Journal

Qualitative Research in Financial MarketsEmerald Publishing

Published: Oct 4, 2011

Keywords: Investment decision making; Constructivism; Lay epistemology theory; Asset valuation; Value investing; Corporate investments; Decision making

References

  • Markets as cultures: an ethnographic approach
    Abolafia, M.Y.
  • Introduction: the embeddedness of economic markets in economics
    Callon, M.
  • The place of logic in reasoning
    Kayser, D.
  • Bias and error in human judgment
    Kruglanski, A.W.; Ajzen, I.
  • Emotions in Finance
    Pixley, J.
  • The Invented Reality: How Do We Know What We Believe We Know? (Contributions to Constructivism)

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