Mergers and acquisitions
Subtitle: an experimental analysis of synergies externalities and dynamics
By: Rachel Croson, Armando Gomes, Kathleen L. McGinn, Markus Nöth
Contributors: Gomes, Armando R.; McGinn, Kathleen L.; Nöth, Markus; Harvard Business School. Division of Research
Edition: 2nd Rev.
Series: Working paper / Division of Research, Harvard Business School -- 05-034; Working paper (Harvard Business School. Division of Research) -- 05-034
Publisher: Division of Research, Harvard Business School
Published: 2004
Place of publication: Boston
Language: eng
Number of pages: 38
Description: Mergers and acquisitions improve market efficiency by capturing synergies between firms. But takeovers also impose externalities (both positive and negative) on the remaining firms in the industry. This paper describes a new equilibrium concept designed to explain and predict mergers in this setting. We experimentally compare the new equilibrium concept to that of competing concepts in situations without and with externalities. Moreover, we examine the predicted dynamics of takeovers and outcome implications of those dynamics. Our experimental results support the predictions of the new equilibrium concept and provide implications for further empirical tests.
Notes: "Version: 27th September 2004"--Added t.p.

Previously published: Rev. c2002. Working paper (Harvard Business School. Division of Research) ; 02-101.

Includes bibliographical references.