A Study of the Interplay between Intuition and Rationality in Valuation Decision Making

Abstract

There is widespread acceptance that both intuition and rationality can play significant roles in valuation decision making. However, a study that specifically examines how intuitive and rational approaches interact is still missing. This study addresses this gap by applying cognitive theories of information processing and using a very detailed analysis of verbal protocols to propose a model of cognitive structure that identifies and describes the reasoning of property valuers during a commercial valuation task. The empirical data suggest that valuers start with an established goal and then engage in analytical and intuitive thinking until a valuation outcome has been reached. It is argued that a major reason for effective valuation decision making, in a real-world context, is that the cognitive processes required by experts' analytical and intuitive thinking demonstrate greater degree of cohesiveness and interestedness. The ability of valuers to integrate more intuition into their largely rational decision making process suggests the need for valuation professional organisations to formally acknowledge intuition as an important component of valuation professional competence and skill requirement and to customise professional valuers' training and development programs to facilitate the development of appropriate intuitive approaches for effective valuation decision making

Cognitive bias, intuitive attributes and investment decision quality in commercial real estate in Uganda

“…This finding is in line with Ramalakshmi et al (2019), who emphasized that investors who are characterized as highly analytical, deliberative and having rule governed mechanisms are able to make quality decisions. Further this finding resonates with Amidu et al (2019) who indicates that investors having business skills are able to extract the best available information associated with desirable and attractive outcomes, thereby increasing the asset growth.…”

The Relation Between Consumers' Frontal Alpha Asymmetry, Attitude, and Investment Decision

“…To summarize, although it is not possible to sharply separate consumers' rational and intuitive mindsets, because both of them are involved and interact within the same decision-making process (Calabretta et al, 2016 ; Amidu et al, 2019 ), as well as we did not directly assess this aspect, the hypothesis that the FAA correlates with both attitude and decision, when consumers assume a more rational mindset to get a rational decision, could account for the results of both the S1 and S2 conditions. Three aspects support this hypothesis.…”

Sensemaking unraveled: how teachers process school performance feedback data

“…The literature emphasizes the expertise of veteran colleagues in this regard. Amidu et al (2019), Chudnoff (2019), andSinclair (2010) referred to intuitive expertise in order to elaborate on this. According to these scholars, more experienced colleagues possess more elaborate cognitive structures or frames to assess information quickly and intuitively without prior deliberation or an explicitly rational approach.…”

“…Experts will discuss a problem of practice based on underlying principles rather than superficial features (Chi et al, 1981). Moreover, their well-developed metacognitive skills allow them to continuously monitor and evaluate their own reasoning and to switch between intuition and rationality without much effort (Amidu et al, 2019).…”