Niek Strohmaier awarded PhD on biases in bankruptcy
On Wednesday 1 July 2020, Niek Strohmaier was awarded his PhD on the cognitive biases of financial backers and legal professionals in the context of the impending insolvency of companies.
The fate of a company and its directors in situations of impending insolvency lies to a large degree in the hands of financial backers and legal professionals. Financial backers have to assess the reasons for the downfall of the company and its prospects to determine what is more worthwhile: refinancing or liquidation. In insolvency proceedings, legal professionals have to determine the reasons for the downfall of the company, since the company’s directors could be held personally liable if mismanagement is considered to be an important reason for the company failing.
In view of the possible negative consequences of an incorrect assessment by these parties, it is most important that the downfall of a company and the actions of its directors are assessed accurately. The study of psychology has demonstrated that humans are liable to so-called cognitive biases that can blur healthy judgments in other respects. This PhD thesis examines to what extent the biases of financial backers and legal professionals can overshadow their assessments. It aims to broaden the understanding of the impact of such biases.
In his PhD thesis, Strohmaier presents evidence that shows that financial backers and legal professionals can both be affected by biases, and he suggests that moral biases can play a role in how some of these biases arise. His thesis closes with a discussion on the implications of his findings for legal science and legal practice.
The PhD research was supervised by Professor J.A.A. Adriaanse and Dr H. Pluut.