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Preemptive Bidding in Takeover Auctions: An Experimental Study


  • Yuri Khoroshilov
  • Anna Dodonova


This paper presents the results of an experimental study on jump bidding in takeover auctions with entry costs. It provides support for signaling hypothesis behind jump bidding and analyzes how the size of the entry costs affects the bidders' behavior and their expected profits. It also shows that jump bidding allows the reallocation of the surplus from the seller to the first bidder but has little effect on the social surplus and the profits of the second bidder. Copyright © 2013 John Wiley & Sons, Ltd.

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  • Yuri Khoroshilov & Anna Dodonova, 2014. "Preemptive Bidding in Takeover Auctions: An Experimental Study," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 35(3), pages 216-230, April.
  • Handle: RePEc:wly:mgtdec:v:35:y:2014:i:3:p:216-230

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    Cited by:

    1. Dodonova, Anna, 2017. "Preemptive bidding and Pareto efficiency in takeover auctions," Economics Letters, Elsevier, vol. 159(C), pages 214-216.
    2. Khoroshilov, Yuri, 2015. "An experimental study of signaling in auctions with a flexible reserve price," The North American Journal of Economics and Finance, Elsevier, vol. 34(C), pages 124-137.
    3. Dodonova, Anna & Khoroshilov, Yuri, 2020. "Preemptive bidding in common value takeover auctions: Social surplus and the target’s revenue," The North American Journal of Economics and Finance, Elsevier, vol. 53(C).

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