On the Role of Paradigms in the Field of Finance (Manuscripts‪)‬

ABSTRACT The purpose of this paper is to show that mainstream academic finance is founded on one paradigm, but with some fundamental changes it can gain much by exploiting perspectives coming from other paradigms. The paper is based on the notion that worldviews underlie academic fields, in general, and finance, in particular. It starts with a discussion of how any worldview can be positioned on a continuum formed by four basic worldviews or paradigms: functionalist, interpretive, radical humanist, and radical structuralist. Then, the paper examines theories, Ph.D. programs, journals, and conferences in mainstream academic finance. It notes that they adhere, almost exclusively, to the functionalist paradigm. Finally, the paper discusses the principles of paradigm diversity, its implications, and requirements. It notes instances of paradigm diversity in theories, Ph.D. programs, journals, and conferences in finance. It concludes that without some fundamental changes, there will be less opportunity for mainstream academic finance to benefit from contributions of the other three paradigms.