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Mergers in Bidding Markets
Janssen, Maarten - 2013
We analyze the effects of mergers in first-price sealed-bid auctions on bidders' equilibrium bidding functions and on revenue. We also study the incentives of bidders to merge given the private information they have. We develop two models, depending on how after-merger valuations are created. In...
Persistent link: https://www.econbiz.de/10013088780
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Competition on common value markets with naèive traders: a theoretical and experimental analysis
Chlaß, Nadine; Güth, Werner - 2007
Theoretically and experimentally, we generalize the analysis of acquiring a company (Samuelson and Bazerman 1985) by allowing for competition of both, buyers and sellers. Naivety of both is related to the idea that higher prices exclude worse qualities. While competition of naive buyers...
Persistent link: https://www.econbiz.de/10010263850
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Mechanism Design with Acquisition of Correlated Information
Bikhchandani, Sushil - 2012
Consider a mechanism design setting in which agents acquire costly information about an unknown, payoff-relevant state of nature. Information gathering is covert. We investigate conditions under which (i) efficient implementation and (ii) full surplus extraction are Bayesian incentive compatible...
Persistent link: https://www.econbiz.de/10013098252
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Multiple Motivations Consequences on Bidder's Optimal Strategy in Takeover Contests
Didier, Hounwanou Degnide - 2013
This paper examines the optimal bidding strategy in takeover contests for a target firm, and the positive correlation between the bidders' valuation. We consider risk neutral bidders who compete for the control of a target firm in which they get initial shareholdings. The bidder valuation for...
Persistent link: https://www.econbiz.de/10013082745
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Strategic Nondisclosure in Takeovers
Li, Jing; Liu, Tingjun; Zhao, Ran - 2022
We examine takeover auctions when an informed bidder has better informationabout the target value than a rival and target shareholders. The informed bidder'sinformation is either hard or soft, and only hard information can be credibly disclosed.We show that withholding information creates a...
Persistent link: https://www.econbiz.de/10013290302
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Optimal Dynamic Selling Mechanism and Deal Protections in Mergers and Acquisitions
Chen, Yi; Wang, Zhe - 2021
entry fees. Depending on the parameters, the optimal mechanism is implemented by a standard auction, or by a two …-stage procedure with exclusive offers to one bidder followed by an auction potentially favoring that bidder. The optimal mechanism may …
Persistent link: https://www.econbiz.de/10013244292
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Impact of Risk Aversion on Bidder's Optimal Strategy in Takeover Contests
Didier, Hounwanou Degnide - 2010
We consider a takeover setting in which bidders are risk averse and study aversion's consequences on their strategy. We found that when bidders are risk averse, under some conditions, their overbidding depends on the size of toeholds they hold. We show that there is a threshold under that a...
Persistent link: https://www.econbiz.de/10014212411
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Signaling Equilibria in Takeovers with Risk-averse Bidders
Carrasco, Diego; Hernandez-Chanto, Allan - 2023
acquirer initiates the takeover, and competitive operations, in which the target organizes an informal auction across potential …
Persistent link: https://www.econbiz.de/10014258241
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The scope of auctions in the presence of downstream interactions and information externalities
Koska, Onur A.; Onur, Ilke; Stähler, Frank - 2015
-cost firm under incomplete information: a separating auction implies adverse selection and relies substantially on commitment to … allocation and transfer rules. A pooling auction serves as a commitment device against ex-post opportunistic behavior and … alleviates adverse selection. It can earn the investor a higher expected payoff than a separating auction, even when consistency …
Persistent link: https://www.econbiz.de/10010496103
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Horizontal mergers with synergies: first-price vs. profit-share auction
Ding, Wei; Fan, Cuihong; Wolfstetter, Elmar - 2010
first-price auction, regardless of whether firms observe the synergy parameter or only the winning bid before they play the …We consider takeover bidding in a Cournot oligopoly when firms have private information concerning the synergy effect … of merging with a takeover target. Two auction rules are considered: standard first-price and profit-share auctions …
Persistent link: https://www.econbiz.de/10008822617