Article ID | Journal | Published Year | Pages | File Type |
---|---|---|---|---|
5077882 | International Journal of Industrial Organization | 2015 | 13 Pages |
Abstract
We consider a two-stage principal-agent model with limited liability in which a CEO is employed as agent to gather information about suitable merger targets and to manage the merged corporation in case of an acquisition. Our results show that the CEO systematically recommends targets with low synergies-even when targets with high synergies are available-to obtain high-powered incentives and, hence, a high personal income at the merger-management stage.
Related Topics
Social Sciences and Humanities
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Economics and Econometrics
Authors
Matthias Kräkel, Daniel Müller,