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...

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...