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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