Cognitive bias in the judgment of business valuations and valuators : how systematic patterns of irrationality affect entrepreneurs, legal professionals and business valuators

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Cognitive bias in the judgment of business valuations and valuators : how systematic patterns of irrationality affect entrepreneurs, legal professionals and business valuators

Type: Doctoral Thesis
Title: Cognitive bias in the judgment of business valuations and valuators : how systematic patterns of irrationality affect entrepreneurs, legal professionals and business valuators
Author: Broekema, M.J.R.
Journal Title: Meijers-reeks
Issue Date: 2020-04-01
Keywords: Business Valuation
Cognitive Bias
Valuation
Bias
Psychology
Entrepreneurship
Valuators
Abstract: Worldwide, conflicts arise daily as a result of differences of opinion about the outcome of a business valuation and the role of valuation experts. These often lead to lengthy and costly lawsuits, the reasons for which are usually sought in technical issues. This thesis, however, focuses on the role of human behavior. More specifically, it examines the extent to which cognitive biases play a role in the assessment of business valuations and valuation experts.Four empirical studies were conducted with entrepreneurs, lawyers and valuation experts. The first three show that stakeholders can be affected by a range of biases, including buyer-seller position effects, anchoring bias, similarity bias, outcome bias, gender bias, and so-called engagement bias. The fourth study concerns a survey among an international group of leading valuation experts with the aim of verifying insights gained in the previous studies. A statement of principles to mitigate cognitive biases in valuation practice is also introduced.The thesis provides empirical insights into the existence of cognitive biases in the context of business valuation and thereby contributes to both practice and theory in this field. It also adds to legal theory with respect to improving our understanding of conflicts.
Promotor: Supervisor: Rest J.I. van der Co-Supervisor: Zwan P.W. van
Faculty: Faculty of Law
University: Leiden University
Handle: http://hdl.handle.net/1887/87192
 

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application/pdf Cover 232.2Kb Under embargo until 2021-04-01
application/pdf Title pages_Preface_Acknowledgements_Contents 234.7Kb Under embargo until 2021-04-01
application/pdf Chapter 1 285.4Kb Under embargo until 2021-04-01
application/pdf Chapter 2 626.3Kb Under embargo until 2021-04-01
application/pdf Chapter 3 319.2Kb Under embargo until 2021-04-01
application/pdf Chapter 4 1.889Mb Under embargo until 2021-04-01
application/pdf Chapter 5 764.9Kb Under embargo until 2021-04-01
application/pdf Chapter 6 241.2Kb Under embargo until 2021-04-01
application/pdf References 265.9Kb Under embargo until 2021-04-01
application/pdf Summary in English 221.9Kb View/Open
application/pdf Summary in Dutch 223.2Kb View/Open
application/pdf Appendices_Curriculum Vitae 977.8Kb Under embargo until 2021-04-01
application/pdf Propositions 212.2Kb View/Open

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