TWe test the influence of information asymmetry on the premium paid for an acquisition. We analyze mergers and acquisitions as English auctions. The theory of dynamic auctions with private and common value predicts that more informed bidders may pay a lower price. We test that prediction with a...

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...

Intuition suggests that an auction maximizes revenue for the seller; yet empirically, many companies sell their businesses in a negotiation with one buyer. I argue that, when potential buyers are market competitors, an auction may generate lower revenue for the seller. First, in an auction,...