Building on recent research in social psychology, this paper analyzes the link between the precision of initial cash offers and M&A outcomes. About one-half of the offers are made at the precision of one or five dollars per share, and an additional one-third at the precision of half dollar or...

Building on recent research in social psychology, this paper analyzes the link between the precision of initial cash offers and M&A outcomes. About one-half of the offers are made at the precision of one or five dollars per share, and an additional one-third at the precision of half dollar or...

We show that CEOs exhibit a hometown bias in acquisitions. Firms are over twice as likely to acquire targets located in the states of their CEOs' childhood homes than similar targets domiciled elsewhere. Small, private home-state deals underperform other small, private deals, and the bias is...

Option prices embed predictive content for the outcomes of pending mergers and acquisitions. This is particularly important in merger arbitrage, where deal failure is a key risk. In this paper, I propose a dynamic asset pricing model that exploits the joint information in target stock and option...

This paper analyses the impact of CEO relative compensation on takeover premiums and bidder performance. Based on a sample of takeover deals between Australian listed targets and bidders from 2000 to 2015, we find that there is insignificant difference between bid premiums offered by CEOs who...

Literature has extensive discussions on the driving forces of takeover activities, including investor sentiment, liquidity, and fundamental shocks. We examine how manager sentiment affects takeover characteristics and long-term performance by using data constructed from textual analysis based on...

Anchoring is a ubiquitous heuristic by which decision makers heavily rely on a piece of information (anchor) that appears prior to a decision. Yet, we know little about its role in strategic decisions. This study considers its influence on acquisition premiums by examining whether a focal...

This study examines how extraversion, a personality trait that signifies more or less positive affect, assertive behavior, decisive thinking, and desires for social engagement, influences chief executive officers' (CEOs') decisions and the ensuing strategic behavior of firms. Using a novel...

Based on prospect theory, we posit that security analysts' target prices function as a reference point for takeover bids and affect deal completion. Using a sample of US takeovers from 1999 to 2014, we find a negative relation between target prices for a takeover target and the chances for...

We investigate the influence of managerial preferences proxied by national culture on takeover performance in a cross-disciplinary international study. To this end, we rely on the cultural dimensions according to Hofstede et al. (2010). Some managerial preferences are related to certain cultural...