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So, what is the cure for bias? I am afraid that there isn't one. However, we can reduce bias by changing the process by which we pay for valuations.
1. No deal maker should ever be asked to analyze whether the deal makes sense. This is what we ask of investment bankers in acquisitions. The process will create bad valuations. I think that acquirers should pay a third party (one that makes money only for doing appraisals) for the valuation.
2. In legal processes, we should have less adversarial valuation, where the expert for one side comes in with a high number and the other side with the low number and the court splits the difference.
3. Trust, but verify. Even the biggest names in the business - Goldman, McKinsey - are susceptible to bias.
As someone who looks at other peoples' valuations all the time, what experience has taught me is that the most critical questions to ask in assessing a valuation are: Who paid the appraiser to do the valuation? What are the potential sources of bias? That tells me a great deal more than perusing the numbers.