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Testing for Distortions in Performance Measures: An Application to Residual Income Based Measures like Economic Value Added

Sloof, Randolph; Praag, Mirjam van - Tinbergen Instituut - 2014

This discussion paper resulted in a publication in the 'Journal of Economics and Management Strategy', forthcoming. Distorted performance measures in compensation contracts elicit suboptimal behavioral responses that may even prove to be dysfunctional (gaming). This paper applies the empirical...

Persistent link: https://www.econbiz.de/10011257274

Understanding Contract Audits: An Experimental Approach

Bertrand, Robert M.M.; Schram, Arthur J.H.C.; Vaassen, … - Tinbergen Instituut - 2011

This discussion paper resulted in a publication in Auditing: A Journal of Practice & Theory (2013). Volume 32(1), pages 1-31. Contract audits aimed at reducing information asymmetry and transaction costs are frequently used in imperfect markets such as defense procurement. This contradicts...

Persistent link: https://www.econbiz.de/10011256024

The Political Origin of Pension Funding

Perotti, Enrico; Schwienbacher, Armin - Tinbergen Instituut - 2007

The paper seeks to explain the huge cross country variation in private pension funding,shaped by historical choice made when universal pension systems were created after theGreat Depression. According to Perotti and von Thadden (2006), large inflationaryshocks due to war damage devastated middle...

Persistent link: https://www.econbiz.de/10011256647

Private Equity Waves

Smit, Han; Berg, Ward A. van den - Tinbergen Instituut - 2006

This study presents a dynamic model for the private equity market in which information revelation and uncertainty rationally explain the cyclical pattern of investment flows into private equity. The net benefit of private equity over public equity is i) uncertain and ii) agents have private...

Persistent link: https://www.econbiz.de/10011256663

Rhineland exit?

Bovenberg, Lans; Teulings, Coen N. - Tinbergen Instituut - 2007

of firm-specific risks. Whereas globalisation has increased firm-specific risk by intensifying competition, globalisation … of capital markets has also greatly increased the scope for diversification of firm-specific risk. Diversification of … this risk on the capital market is an efficient form of social insurance. Reducing the claims of workers on the surplus of …

Persistent link: https://www.econbiz.de/10011256667

Decision Making in Incomplete Markets with Ambiguity -- A Case Study of a Gas Field Acquisition

Zhao, Lin; Wijnbergen, Sweder van - Tinbergen Instituut - 2014

(Generalized AutoRegressive Score) and GARCH models, extending them to Student's t-GARCH and t-GAS. Second, an important risk … standard option pricing inapplicable. Therefore we parametrize the investor's risk preference and use utility indifference …

Persistent link: https://www.econbiz.de/10011256690

Acquisitions as a Real Options Bidding Game

Smit, Han T.J.; Berg, Ward A. van den; Maeseneire, Wouter De - Tinbergen Instituut - 2004

This paper uses a unified treatment of real options and game theory to examine value appropriation in takeovers within a competitive environment of imperfect information. The integrated model considers a potential target as a shared real option on a bundle of resources. Competing potential...

Persistent link: https://www.econbiz.de/10011256936

Winning by Losing: Evidence on Overbidding in Mergers

Malmendier, Ulrike; Moretti, Enrico; Peters, Florian - Tinbergen Instituut - 2011

Do shareholders of acquiring companies profit from acquisitions, or do acquiring CEOs overbidand destroy shareholder value? Answering this question is difficult since the hypotheticalcounterfactual is hard to determine. We exploit merger contests to address the identificationissue. In those...

Persistent link: https://www.econbiz.de/10011257222

Consolidation Waves

Berg, Ward A. van den; Smit, Han T.J. - Tinbergen Instituut - 2007

This paper explains why consolidation acquisitions occur in waves and it predicts the differing role each firm is likely to play in the consolidation game. We propose that whether a firm assumes the role of rival consolidator, target, or passive observer depends on the position of the firm...

Persistent link: https://www.econbiz.de/10011257223

Countries of a Feather flock together

Marrewijk, Charles van; Garita, Gus - Tinbergen Instituut - 2008

We analyze the economic forces underlying cross-border Mergers and Acquistions (M&As) using a large bilateral panel data set. The frequent occurrence of "zero" observations provides essential information on the structure of M&A flows, which we model empirically using a two-stage procedure. At...

Persistent link: https://www.econbiz.de/10011257313