Arbeitspapier

Merger negotiations and ex-post regret

We consider a setting in which two potential merger partners each possess private information pertaining both to the profitability of the merged entity and to stand-alone profits, and we investigate the extent to which this private information makes ex-post regret an unavoidable phenomenon in merger negotiations. To this end, we consider ex-post incentive compatible mechanisms, which use both players' reports to determine whether or not a merger will take place and what each player will earn in each case. When the outside option of at least one player is known, the efficient merger decision can be implemented by such a mechanism under plausible budget-balance requirements. When neither outside option is known, we show that the potential for regret-free implementation is much more limited, unless the budget balance condition is relaxed to permit money-burning in the case of false reports.

Sprache
Englisch

Erschienen in
Series: Working Paper ; No. 0607

Klassifikation
Wirtschaft
Asymmetric and Private Information; Mechanism Design
Market Structure, Firm Strategy, and Market Performance: General
Mergers; Acquisitions; Restructuring; Voting; Proxy Contests; Corporate Governance
Thema
Mergers
Mechanism
Design
Asymmetric
Information
Interdependent
Valuations
Efficient
Mechanisms
Fusion
Asymmetrische Information
Rentabilität
Verhandlungstheorie
Theorie

Ereignis
Geistige Schöpfung
(wer)
Gärtner, Dennis
Schmutzler, Armin
Ereignis
Veröffentlichung
(wer)
University of Zurich, Socioeconomic Institute
(wo)
Zurich
(wann)
2007

Handle
Letzte Aktualisierung
10.03.2025, 11:43 MEZ

Datenpartner

Dieses Objekt wird bereitgestellt von:
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. Bei Fragen zum Objekt wenden Sie sich bitte an den Datenpartner.

Objekttyp

  • Arbeitspapier

Beteiligte

  • Gärtner, Dennis
  • Schmutzler, Armin
  • University of Zurich, Socioeconomic Institute

Entstanden

  • 2007

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