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Valuation Averaging: A New Procedure For Resolving Valuation Disputes, Keith Sharfman
Valuation Averaging: A New Procedure For Resolving Valuation Disputes, Keith Sharfman
Rutgers Law School (Newark) Faculty Papers
In this Article, Professor Sharfman addresses the problem of "discretionary valuation": that courts resolve valuation disputes arbitrarily and unpredictably, thus harming litigants and society. As a solution, he proposes the enactment of "valuation averaging," a new procedure for resolving valuation disputes modeled on the algorithmic valuation processes often agreed to by sophisticated private firms in advance of any dispute. He argues that by replacing the discretion of judges and juries with a mechanical valuation process, valuation averaging would cause litigants to introduce more plausible and conciliatory valuations into evidence and thereby reduce the cost of valuation litigation and increase the …
Measuring Recovery For Non-Contractual Investment, Omri Ben-Shahar, Robert A. Mikos
Measuring Recovery For Non-Contractual Investment, Omri Ben-Shahar, Robert A. Mikos
Law & Economics Working Papers Archive: 2003-2009
Parties who make investments that generate externalities may sometimes recover from the beneficiaries, even in the absence of contract. Previous scholarship has shown that granting recovery, based on either the cost of the investment or the benefit it confers, can provide optimal incentives to invest. However, this article demonstrates that the law often awards recovery that is neither purely cost-based, nor purely benefit-based, and instead equals either the greater-of or lesser-of the two measures. These hybrid approaches to recovery distort incentives to invest. The article demonstrates the prevalence of these practices, and explores informational and related reasons why they emerge. …