Merger negotiations and ex-post regret

• 成果类型: Article
• 署名作者: Gaertner, Dennis L.; Schmutzler, Armin
• 署名单位: University of Zurich
• 刊物名称: JOURNAL OF ECONOMIC THEORY
• ISSN/ISSBN: 0022-0531
• DOI: 10.1016/j.jet.2009.01.002
• 发表日期: 2009
• 页码: 1636-1664
• 关键词: mergers; mechanism design; asymmetric information; interdependent valuations; Efficient mechanisms

摘要

We consider a setting in which two potential merger partners each possess private information pertaining both to the profitability of the merged entity and to stand-alone profits, and we investigate the extent to which this private information makes ex-post regret an unavoidable phenomenon in merger negotiations. To this end, we consider ex-post incentive compatible mechanisms, which use both players' reports to determine whether or not a merger will take place and what each player will earn in each case. When the outside option of at least one player is known, the efficient merger decision can be implemented by such a mechanism under plausible budget-balance requirements. When neither outside option is known, we show that the potential for regret-free implementation is much more limited, unless the budget balance condition is relaxed to pen-nit money-burning in the case of false reports. (C) 2009 Elsevier Inc. All rights reserved.