Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/127474
Authors: 
Karbowski, Adam
Prokop, Jacek
Year of Publication: 
2015
Citation: 
[Journal:] Journal of International Studies [ISSN:] 2306-3483 [Volume:] 8 [Issue:] 2 [Pages:] 18-33
Abstract: 
The objective of this paper is to use laboratory experiments to test the dynamic theory of free riding among the target shareholders during a takeover attempt. We construct our experiments to reflect the dynamics of unconditional bidding suggested by Harrington and Prokop (1993) and the dynamics of conditional bidding analyzed by Prokop (2003). The experimental results show that the observed tendering probabilities are higher than the theoretically predicted values in the case of unconditional bidding. Thus the actual behavior of shareholders is characterized by much less free riding than predicted by the theory of unconditional tender offers. In the case of conditional offers, the theoretical predictions for the tendering probabilities are confirmed by the laboratory behavior of shareholders in the case of multiple bidding. As suggested by the theory, the tendering probabilities are lower under multiple conditional bids than under unconditional offers.
Subjects: 
takeovers
tender offers
conditional and unconditional bids
experiments
JEL: 
G34
Persistent Identifier of the first edition: 
Creative Commons License: 
http://creativecommons.org/licenses/by/3.0/legalcode
Document Type: 
Article

Files in This Item:
File
Size





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.