Using data on auctions of companies, we estimate valuations (maximum willingness to pay) of strategic and financial bidders from their bids. We find that a typical target is valued higher by strategic bidders. However, 22.4% of targets in our sample are valued higher by financial bidders. These...

While acquisitions are a popular form of investment, the link between firms' financial constraints and acquisition policies is not well-understood. We develop a model in which financially-constrained bidders decide when to approach the target, how much to bid, and whether to bid in cash or...

This essay reviews selected theories and empirical evidence describing how bidders and targets navigate four complex decisions involved in any corporate takeover attempt: (1) deal initiation, (2) pre-offer toehold acquisition, (3) offer price and revisions, and (4) the method of payment. We...

We review recent research into how firms navigate four complex decisions in corporate takeovers: (a) deal initiation, (b) pre-offer toehold acquisition, (c) the initial (public) offer price, and (d) the payment method. We focus the evidence on public targets and the theory on first-price or...

In procurement auctions, suppliers' senior managers in charge of bidding often rely on advisors, such as project managers and technical specialists, to evaluate project costs. These advisors may be biased for inflating the costs due to agency or career concerns. We study the procurement agency's...