We study simultaneous security-bid second-price auctions with competition among sellers for potential bidders. The sellers compete by designing ordered sets of securities that the bidders can offer as payment for the assets. Upon observing auction designs, potential bidders decide which auctions...

In this paper, we empirically identify rational overbidding using evidence from Hong Kong land auctions. In particular, we test for rational overbidding through a toehold effect in bidding behavior (Burkart (1995), Bulow, Huang and Klemperer, (1999)). In Hong Kong, auctions are widely used by...

I show that firms may optimally place their own equity with other firms in anticipation of possible future corporate control activity. In the model, a target and potential acquirer can negotiate before synergy values are learned. I find that equity implements an optimal mechanism, benefiting...

Target firms are often faced with bidders that are not equally well informed. This reduces the competition between the bidders, since a less well informed bidder fears the winner's curse more. We analyze how a target should optimally be sold in the presence of asymmetric bidders. We show that a...

We present unique empirical tests for overbidding using data from Sweden's auction bankruptcy system. The main creditor (a bank) can neither bid in the auction nor refuse to sell in order to support a minimum price. We argue that the bank may increase its expected revenue by financing a bidder...

This paper extends the corporate governance literature such as Alchian and Demsetz (1972) by analyzing the use of special committees of disinterested directors by target firms during corporate takeovers. Our sample spans post Sarbanes-Oxley from 2003 through 2007, under which boards of directors...

This study examines the emergence of the Bulgarian stock market and the role of controlling blockholders. A new approach using mass privatization auction data measures the premium for control and demonstrates that, in the absence of legal constraints, majority owners extract more than 85% of...

A number of proposals for reforming Chapter 11 suggest that a mandatory cash auction of the bankrupt firm would lead to more efficient investment outcomes than a reorganization based system. However, recent empirical work describing reorganizations in European countries which mandate the sale of...

We provide new evidence on termination provisions and the takeover bidding process. Our central contribution is a novel database from Securities and Exchange Commission (SEC) documents that accurately measures the incidence of termination provisions and the depth of competition in takeover...

As measured by the number of bidders that publicly attempt to acquire a target, the takeover arena in the 1990s was not competitive. However, we develop a new measure competition based on the pre-public, private takeover process that indicates that public takeover activity is only the tip of the...