Having more potential raiders weakens the takeover threat
We argue in this paper that a more active market for corporate control may weaken the takeover threat. We show that an increase in the number of potential raiders tends to decrease the probability of a takeover. This in turn weakens managerial incentives. The lower managerial effort level that results in equilibrium negatively affects the ex ante value of the firm.
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- Elberfeld, Walter & Wolfstetter, Elmar, 1999.
"A dynamic model of Bertrand competition with entry,"
International Journal of Industrial Organization,
Elsevier, vol. 17(4), pages 513-525, May.
- Elmar Wolfstetter & Walter Elberfeld, 1997. "A Dynamic Model of Bertrand Competition with Entry," Microeconomics 9701003, EconWPA.
- repec:hrv:faseco:30728046 is not listed on IDEAS
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- Andrei Shleifer & Robert W. Vishny, 1996. "A Survey of Corporate Governance," NBER Working Papers 5554, National Bureau of Economic Research, Inc.
- Joseph E Harrington Jr, 2001. "A Simple Game-Theoretic Explanation for the Relationship Between Group Size and Helping," Economics Working Paper Archive 417, The Johns Hopkins University,Department of Economics.
- Simon P. Anderson & Maxim Engers, 2002. "A Beautiful Blonde: a Nash coordination game," Virginia Economics Online Papers 359, University of Virginia, Department of Economics. Full references (including those not matched with items on IDEAS)
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