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Merger Negotiations and Ex-Post Regret
Gärtner, Dennis; Schmutzler, Armin - C.E.P.R. Discussion Papers - 2006
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 investigate the extent to which this private information makes ex-post regret an unavoidable phenomenon in...
Persistent link: https://www.econbiz.de/10005791966
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Governance and Comovement Under Common Ownership
Edmans, Alex; Levit, Doron; Reilly, Devin - C.E.P.R. Discussion Papers - 2014
This paper studies the corporate governance and asset pricing implications of investors owning blocks in multiple firms. Common wisdom is that multi-firm ownership weakens governance because the blockholder is spread too thinly. We show that this need not be the case. In a single-firm benchmark,...
Persistent link: https://www.econbiz.de/10011084086
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CEO Compensation and Strategy Inertia
Inderst, Roman; Mueller, Holger M - C.E.P.R. Discussion Papers - 2006
This paper considers the joint optimal design of CEOs' on-the-job compensation and severance pay in a general optimal contracting framework. We obtain a novel argument for high-powered, non-linear CEO compensation such as bonus schemes and option grants that is different from existing arguments...
Persistent link: https://www.econbiz.de/10005791544
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Unbundling Ownership and Control
Ferreira, Daniel; Ornelas, Emanuel; Turner, John L. - C.E.P.R. Discussion Papers - 2007
Treating control as an asset that can be bought and sold, we introduce a model of the simultaneous and separable trading of ownership and control in a private information setting. The model provides a novel explanation for the prevalence and persistence of the separation of ownership from...
Persistent link: https://www.econbiz.de/10005123700
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Risk Arbitrage in Takeovers
Cornelli, Francesca; Li, David Daokui - C.E.P.R. Discussion Papers - 1998
The paper studies the role of risk arbitrage in takeover contests. We show that arbitrageurs have an incentive to … accumulate non-trivial stakes in a company target of a takeover. For each arbitrageur, the knowledge of his own presence (and … between trading volume, takeover premium, bidder's toehold, liquidity of the shares and the probability that the takeover will …
Persistent link: https://www.econbiz.de/10005504384
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Active Agents, Passive Principals: Does High-Powered CEO Compensation Really Improve Incentives
Dow, James; Raposo, Clara - C.E.P.R. Discussion Papers - 2002
In this Paper we use agency theory to study the active role of the CEO in the formulation of corporate strategy. We allow the agent (CEO) to play a role in defining the parameters of the agency problem, in an incomplete contracting model in which the agent can be rewarded based only on financial...
Persistent link: https://www.econbiz.de/10005504388
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The Ownership of Ratings
Faure-Grimaud, Antoine; Peyrache, Eloïc; Quesada, Lucía - C.E.P.R. Discussion Papers - 2005
Standard & Poor's provides corporate governance ratings to firms who can, upon learning those, decide to reveal them or not to the market. This paper identifies the circumstances under which such a simple ownership contract over ratings can emerge as the optimal arrangement. Firms hiding their...
Persistent link: https://www.econbiz.de/10005067394
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Takeovers and the Dynamics of Information Flows
Chemla, Gilles - C.E.P.R. Discussion Papers - 2003
This Paper analyses the effect of a possible takeover on information flows and on the terms of trade in business … surplus from the buyer. The possibility of a takeover that leaves the buyer with a higher (lower) rent than the incumbent … on the performance of takeover targets and trade credit. …
Persistent link: https://www.econbiz.de/10005662138
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Almost Common Value Auctions: The 'Wallet Game' and its Applications to Takeover Battles and Airwaves Auctions
Klemperer, Paul - C.E.P.R. Discussion Papers - 1997
greatly exacerbated by entry costs or bidding costs. We discuss applications to airwaves auctions and takeover battles …
Persistent link: https://www.econbiz.de/10005791269
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Reserve Prices in Auctions as Reference Points
Rosenkranz, Stephanie; Schmitz, Patrick W - C.E.P.R. Discussion Papers - 2004
We consider second-price and first-price auctions in the symmetric independent private values framework. We modify the standard model by the assumption that the bidders have reference-based utility, where the reserve price (minimum bid) plays the role of the reference point. In contrast to the...
Persistent link: https://www.econbiz.de/10005792017