The Winner's Curse and Bidder Competition in Acquisitions: Evidence from Failed Bank Auctions
作者:
S. MICHAEL GILIBERTO,
NIKHIL P. VARAIYA,
期刊:
The Journal of Finance
(WILEY Available online 1989)
卷期:
Volume 44,
issue 1
页码: 59-75
ISSN:0022-1082
年代: 1989
DOI:10.1111/j.1540-6261.1989.tb02404.x
出版商: Blackwell Publishing Ltd
数据来源: WILEY
摘要:
ABSTRACTThis study examines the effect of bidder competition in acquisitions. We use predictions from auction theory to test whether acquirers of failed banks overpay (the “winner's curse”) when bidding in FDIC sealed‐bid purchase and assumption (P&A) transactions (auctions). The empirical results indicate thatwinningbids tend to increase as the number of competitors increases, as predicted by theory. We also find that bid levels ofallbidders increase with increased competition, which is consistent with bidders' failing to adjust for the winner's curse in a common value auction setting. However, additional tests using winning bids only are consistent with both a common value and a private values model, so this result should be interpreted with ca
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