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The purpose of this paper is to provide an overview of the paradigmatic context and structure of the current theories and controversies in mainstream academic finance. It identifies the context among paradigms and the structure within the identified paradigm. The paper is based on the view that worldviews underlie theories and controversies in general, and those of finance, in particular. It notes how any worldview can be positioned on a continuum formed by four basic paradigms: functionalist, interpretive, radical humanist, and radical structuralist. Then, the paper notes that theories and controversies in mainstream academic finance, despite their apparent diversity, are founded on and associated with the functionalist paradigm. Then, the paper continues with the discussion of the hierarchical structure of paradigms. It discusses that it consists of three consecutive levels: paradigm; metaphor; and puzzle solving. It looks at a sample of prominent controversies in academic finance and notes that they belong to the substructure of the functionalist paradigm. Throughout, the paper emphasizes that, in the future, mainstream academic finance should benefit from the contributions of the other three paradigms.
Kavous Ardalan (Wed,) studied this question.