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Having more potential raiders weakens the takeover threat


  • Toolsema, Linda A.

    (Groningen University)


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.

Suggested Citation

  • Toolsema, Linda A., 2003. "Having more potential raiders weakens the takeover threat," CCSO Working Papers 200304, University of Groningen, CCSO Centre for Economic Research.
  • Handle: RePEc:gro:rugccs:200304

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    References listed on IDEAS

    1. 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.
    2. repec:hrv:faseco:30728046 is not listed on IDEAS
    3. Shleifer, Andrei & Vishny, Robert W, 1997. " A Survey of Corporate Governance," Journal of Finance, American Finance Association, vol. 52(2), pages 737-783, June.
    4. 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.
    5. Simon P. Anderson & Maxim Engers, 2002. "A Beautiful Blonde: a Nash coordination game," Virginia Economics Online Papers 359, University of Virginia, Department of Economics.
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