The Hubris Hypothesis: Emperical Evidence

Paper Number: 
1390
Creation date: 
07/10/2014
Abstract: 

The Hubris Hypothesis is grounded on a failure to adequately account for the winner's curse, which leads to overbidding.  Surprisingly, few papers have attempted to develop a direct empirical test of the presence of overbidding of M&A contests.  We develop two such tests in this paper.  Our results strongly support the existence of overbidding.

 

Paper Length: 
49 pages
Keywords: 
mergers and acquisitions, Hubris hypothesis
Paper: