Abstract
This paper discusses valuation within the judicial processes by comparing the adversarial and inquisitorial systems of litigation. It evaluates adversarial and inquisitorial litigation on the legal systems’ ability to aid processes that lead to discovery of knowledge. It argues that much of the information required for accurate valuation must be discovered. While the adversarial method of litigation is essentially a competitive model of evidence production; the inquisitorial system comprises only the expert/principle searcher, and lacks a competitive discovery process. Therefore, as a system, adversarial litigation may be more conducive for error minimization in enforcing rules than inquisitorial litigation. On the question of business valuation of firms under Chapter 11, both the adversarial and inquisitorial systems are problematic, given that market competition leading to discovery of prices and valuation is impossible within the judicial system of valuation.
Acknowledgments
Author would like to thank the participants of the symposium on Austrian perspectives on business valuation at Texas Tech University, and Alex Salter for comments and suggestions.
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Articles in the same Issue
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- Economic Calculation and the Productivity of Investment
- Incorporating Social Capital into the Austrian Business Cycle Theory
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Articles in the same Issue
- Private Governance and the Pricing of Political Enterprises
- Investment in New Proved Oil Reserves: An Austrian Perspective
- Economic Calculation and the Productivity of Investment
- Incorporating Social Capital into the Austrian Business Cycle Theory
- Austrian Economics, Market Process, and the EVA® Framework
- Capital Valuation, What is it and Why does it Matter? Insights from Austrian Capital Theory
- Adversarial versus Inquisitorial Systems: Error and Valuation