Acquisition experience and the winner’s curse in corporate acquisitions

[en] The winner’s curse describes the behavioural phenomenon that the winner of a bidding contest pays a price that is too high. This paper shows that experiential learning cannot prevent a winner’s curse on the market of corporate control as acquiring firms with acquisition experience still pay a higher price for the target in a bidding contest. Acquisition experience, however, is related to a superior post-acquisition performance of the winning firm after acquisitions associated with a bidding contest.

Disciplines :

Strategy & innovation

Author, co-author :

Arroyabe, Marta ; Essex Business School, University of Essex, Southend-On-Sea, United Kingdom ; Department of Economics and Management, University of Luxembourg, Esch-sur-Alzette, Luxembourg

HUSSINGER, Katrin ; University of Luxembourg > Faculty of Law, Economics and Finance (FDEF) > Department of Economics and Management (DEM) ; Department of Management, Strategy and Innovation, K.U. Leuven, Leuven, Belgium ; Centre for European Economic Research (ZEW), Mannheim, Germany

External co-authors :

yes

Language :

English

Title :

Acquisition experience and the winner’s curse in corporate acquisitions

Publication date :

2024

Journal title :

Applied Economics

ISSN :

0003-6846

eISSN :

1466-4283

Publisher :

Routledge

Volume :

Issue :

Pages :

3247 - 3261

Peer reviewed :

Peer Reviewed verified by ORBi

Additional URL :

https://www.tandfonline.com/doi/pdf/10.1080/00036846.2023.2206108

Available on ORBilu :

since 17 January 2025

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