The Hubris Hypothesis: Emperical Evidence
Paper Number:
1390
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
Paper:
SSWP_1390.pdf