Valuation models and Simon's bounded rationality

Resumo

This paper aims at reconciling the evidence that sophisticated valuation models are increasingly used by companies in their investment appraisal with the literature of bounded rationality, according to which objective optimization is impracticable in the real world because it would demand an immense level of sophistication of the analytical and computational processes of human beings. We show how normative valuation models should rather be viewed as forms of reality representation, frameworks according to which the real world is perceived, fragmented for a better understanding, and recomposed, providing an orderly method for undertaking a task as complex as the investment decision.

Ficha do documento

Tipo

Artigo científico

Ano

2009

Instituição

Editora 34

Fonte

Repositório da FGV

Idioma

Inglês

Acesso

Acesso aberto

DOI

10.1590/S0101-31572009000300004

Identificador

oai:repositorio.fgv.br:10438/21697

Palavras-chave

Bounded rationalityInvestmentDecision-makingCase studyAdministração de empresasInvestimentos - AvaliaçãoProcesso decisório