Learning or Hubris? Why CEOs Create Less Value in Successive Acquisitions

The authors discuss research by Nihat Aktas and others concerning why chief executive officers (CEO) create less value with successive acquisitions. Although observers may think that CEO hubris or overconfidence is to blame, the study by Aktas suggests that CEOs are able to correctly assess expected value. However, with successive acquisitions, they improve their ability to manage the risks that accompany the integration of acquisitions. Therefore, they may be willing to pay a higher price for acquisitions