The game theoretic discussion of best price clauses has alway implicitly been based on a durable good model with one generation of consumers. This paper argues that the intuition derived from this set up is misleading. By comparison with an overlapping generation model it is shown that the one...

The paper analyzes the optimal decision of a raider who can choose between a hostile and a friendly takeover. Empirical evidence shows that the transaction costs of a hostile takeover are much higher than those of a friendly one. The question therefore arises why a raider should ever wish to...