Life-Value Mispricing and the Term Structure of Correction: A Structural Framework of Organizational Friction

This paper presents a structural framework that links organizational dynamics to asset pricing within the Life-Value Reflow Theory. The firm is modeled as a bounded local subsystem where finite individual time endowments (T) are aggregated, transformed into value flows, and partially lost through internal structural frictions. Four core indicators are defined: the network anchoring coefficient (Ccompany), the base-layer structural retention rate (etacompanybase), the non-monetary reflow efficiency (gammacompany), and the reflow signal-to-noise ratio (SNRRcompany). These indicators can be computed from standard financial statements and organizational data. Using these micro-level mechanisms, the Discounted Life-Value Reflow (D-LVR) model is introduced. This model extends conventional discounted cash flow valuation by including an endogenous discount rate that reflects extraction risk and reflow clarity. A scale-invariant Life-Value Price-to-Earnings ratio (LV-PE) is derived to adjust traditional valuation multiples for structural characteristics. Four organizational archetypes are identified, and their implications for asset pricing regimes are examined. The framework generates testable hypotheses relating organizational extraction dynamics to future stock returns. It predicts a term structure of mispricing wherein firms with high structural extraction and low signal clarity exhibit short-run overvaluation followed by long-run underperformance. The approach is consistent with the ontological foundations of Life-Value Reflow Theory and remains empirically tractable. It offers a unified structural perspective on the relationship between internal organizational processes and capital market valuations.