In this paper we analyze the connection between Nash bargaining and non-cooperative bargaining, the so-called Nash program, to solve the question of whether outside options should be considered as a the disagreement point.

We study the tendering decisions of shareholders endowed with multiple shares to test game-theoretic models of the tendering process in the laboratory. An equilibrium outcome in which value-increasing takeovers always just succeed fails to emerge. Rather, tendered shares cycle around the...