In a world where the objectives of managers differ from the objectives of shareholders, the analysis of management response to a tender offer must consider the possibility that management's response is a function of their equity interest in the company.

In the paper “Predicting the Outcome of Tender Offers: An Endogeneity Problem”, we argue that previous econometric models designed to predict the outcome of tender offers have been estimated incorrectly. We illustrate that the source of the estimation error comes from variables which are...