Does the Free-rider Problem Occur in Corporate Takeovers? Evidence from Laboratory Markets.

We explore experimentally whether the free-rider problem occurs in corporate takeovers. While Grossman and Hart's (1980) classical proposition states that due to the free-rider problem takeovers never succeed, we observe a considerable number of successful takeovers in real capital markets. To solve this paradox, we conducted an experimental study by constructing simple laboratory markets of atomistic shareholders.

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Year of publication:	2000
Authors:	Hirota, S. ; Saijo, T. ; Hamaguchi, Y. ; Kawagoe, T.
Institutions:	Institute of Social and Economic Research (ISER), Osaka University
Subject:	CAPITAL \| MARKET \| SHAREHOLDERS

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Series:	Osaka - Institute of Social and Economic Research.
Type of publication:	Book / Working Paper
Notes:	46 pages
Classification:	H3 - Fiscal Policies and Behavior of Economic Agents ; G1 - General Financial Markets
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10005639237