Classroom Games Corporate Takeover and the Buyer's Curse
نویسندگان
چکیده
This paper presents a simple classroom game in which student compete to bid on a corporation for sale. In this experiment, the students know prior to bidding the amount of “value added” their new management capabilities will provide. The risk is that the bidder does not know precisely the base value of the firm under its current management, and only firms with base values below the takeover bid will be sold. Thus the bidder may pay more than a firm is worth under new management, which is known as the "buyer’s curse." This exercise can be used to motivate discussions about naïve versus strategic bidding, rational behavior, and the effects of risk.
منابع مشابه
Takeover and Monitor under External Corporate Control
We study how both external corporate governance factors and internal corporate governance factors jointly affect the large shareholder’s takeover or monitor decision. The large shareholders monitor the management and have option to takeover the firm. External corporate governance forces impose stealing costs to the manager. In equilibrium, large shareholder’s takeover or monitoring decision, ta...
متن کاملCorporate governance and hostile takeovers
In the preceding paper Shivdasani (1993) estimates equations predicting the probability of a hostile takeover as a function of governance characteristics. He finds that additional outside directorships by board members decrease the probability of a takeover. Ownership by management and by affiliated blockholders also decreases the probability of a takeover, while ownership by unaffiliated block...
متن کاملCorporate Financial Performance and the Use of Takeover Defenses
. This paper tests the hypothesis that the threat of a contested takeover improves corporate performance. This is done by a cross-sectional analysis of listed Danish firms with and without effective takeover defenses. Takeover defenses adopted by Danish firms mainly consist of dual class voting rights often in combination with foundation ownership. Using simultaneous equation estimation to deal...
متن کاملTakeovers and the Dynamics of Information Flows
This paper analyzes the e ect of a possible takeover on information ows and on the terms of trade in business relationships. We consider a longterm relationship between a rm and a privately informed stakeholder, say a buyer. In our model, takeovers both increase the surplus from trade and enable the rm to extract a potentially higher share of the surplus from the buyer. The possibility of a tak...
متن کاملGames as an Interactive Classroom Technique: Perceptions of Corporate Trainers, College Instructors and Students
This two-part study investigates perceptions of interactive classroom teaching techniques for adult learning. In the first part of the study 62 college faculty members and 45 corporate trainers were surveyed about their teaching and training methods. The survey had two main objectives: to determine rates of classroom techniques used, and to determine influences on teaching styles. Trainers used...
متن کاملذخیره در منابع من
با ذخیره ی این منبع در منابع من، دسترسی به آن را برای استفاده های بعدی آسان تر کنید
عنوان ژورنال:
دوره شماره
صفحات -
تاریخ انتشار 1999