For decades businessmen have sought to understand and predict what the stock market is going to do. They have traced it back through countless spreadsheets and business models and have arrived at a conclusion: Consumer decisions drive the sauces and failure of our economy, all other things held constant.... ie government, acts of God, ect.
Thus was born the study of Behavioral Finance, the study of why we buy what we be. Moreover, it is the study of how we make financial decisions. Now, one may be tempted to retort, "James you're crazy, people simply make decision that will help themselves. They choose the choice that makes them most happy." Well, I am sorry dear friend but this train of thought is flawed.
I can not count how many packs of basketball cards I bought looking for that one Jordan rookie card... Or what about the classic women who buys a dress she will only wear once... maybe... if she feels like it. The fact is we people act irrationally, especially when deciding what to do with our money.
This principle is also present in the stock market. Investors, well educated ones mind you, make "gut" decisions that may pay off or may not. It is an emotional decision that is based on tens, hundreds, or thousands of variables that are weighed against each other subconscously yielding our rational or irrational decision.
Behavioral Finance reminds me of the Human Genome Project in the sense of the mountains of data that must be considered. Emotions such as love and fear have a lot to do with why we decide what we decide. Now if we can design a system that could predict what we would decide, is that even a DSS anymore? Have we just broken the barrier and enter the AI arena? Maybe not.
Decision Support Systems are designed to take into account the users disposition. the greater the accuracy of that measure of disposition, the more efficient the DSS will be. Therefore Behavioral Finance and DSS implementation are extremely related and in fact as the Finance decisions become more researched, it will depend on DSS's for its existence.
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An interesting discussion. But, I want to focus on your point about the "gut feeling" being an "emotional decision." I disagree. Sometimes these "gut feelings" are really fairly well reasoned judgments that are based on lots of experience and insight. Other times they are built upon quick pattern matching schemes of which our conscious is not aware. What we need to consider is how the DSS can help them. In particular, the idea of helping the decision maker monitor his/her performance with these tools and track quantitative data that might help stimulate or correct such "gut feelings."
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