This theory is based around the idea that people interacting create their own reality and construct, shaping their environment through conversation. This theory has a practical application.

An example of this would be Shutter Island, where a schizophrenic murderer (Leonardo DiCaprio) lives in, and believes a reality that is not true. His understanding of the world is falsified because he shapes it in his mind. When Leonardo meets his psychiatrist, his words begin to bring him back to reality and he realizes his construct has been fake.