Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/128614
Authors: 
Kräkel, Matthias
Müller, Daniel
Year of Publication: 
2014
Series/Report no.: 
Bonn Econ Discussion Papers 02/2014
Abstract: 
We consider a two-stage principal-agent model with limited liability in which a CEO is employed as agent to gather information about suitable merger targets and to manage the merged corporation in case of an acquisition. Our results show that the CEO systematically recommends targets with low synergies - even when targets with high synergies are available - to obtain high-powered incentives and, hence, a high personal income at the merger-management stage.
Subjects: 
acquisition
merger
moral hazard
JEL: 
D82
D86
G34
Document Type: 
Working Paper

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