Similar bidders in takeover contests

• 成果类型: Article
• 署名作者: Dai, Yun; Gryglewicz, Sebastian; Smit, Han T. J.; De Maeseneire, Wouter
• 署名单位: Erasmus University Rotterdam; Erasmus University Rotterdam - Excl Erasmus MC; Vlerick Business School
• 刊物名称: GAMES AND ECONOMIC BEHAVIOR
• ISSN/ISSBN: 0899-8256
• DOI: 10.1016/j.geb.2013.08.010
• 发表日期: 2013
• 页码: 544-561
• 关键词: Takeover contests; interdependent valuations; information externality; Competition intensity; experiment

摘要

When bidders in a corporate takeover have related resources and post-acquisition strategies, their valuations of a target are likely to be interdependent. This paper analyzes sequential-entry takeover contests in which similar bidders have correlated private valuations. The level of similarity affects information content of bids and bidding competition. Our model predicts that expected acquisition prices and the probability of multiple-bidder contests are the highest for intermediately similar bidders. We test these predictions in laboratory experiments in which we control the similarity between bidders. The experimental data confirm the non-monotonic effects of similarity on prices and on the frequency of multiple-bidder contents. (C) 2013 Elsevier Inc. All rights reserved.