Gorbenko, Alexander;
Malenko, Andrey;
(2024)
Auctions with Endogenous Initiation.
The Journal of Finance
, 79
(2)
pp. 1353-1403.
10.1111/jofi.13288.
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Abstract
We study initiation of takeover auctions by potential buyers and the seller. A bidder's indication of interest reveals that she is optimistic about the target. If bidders' values have a substantial common component, as in takeover battles between financial bidders, this effect disincentivizes bidders from indicating interest, and auctions are seller-initiated. Conversely, in private-value auctions, such as battles between strategic bidders, equilibria can feature both seller- and bidder-initiated auctions, with the likelihood of the latter decreasing in commonality of values and the probability of a forced sale by the seller. We also relate initiation to bids and auction outcomes.
| Type: | Article |
|---|---|
| Title: | Auctions with Endogenous Initiation |
| Open access status: | An open access version is available from UCL Discovery |
| DOI: | 10.1111/jofi.13288 |
| Publisher version: | https://doi.org/10.1111/jofi.13288 |
| Language: | English |
| Additional information: | This version is the author accepted manuscript. For information on re-use, please refer to the publisher’s terms and conditions. |
| UCL classification: | UCL > Provost and Vice Provost Offices > UCL BEAMS > Faculty of Engineering Science UCL > Provost and Vice Provost Offices > UCL BEAMS > Faculty of Engineering Science > UCL School of Management UCL > Provost and Vice Provost Offices > UCL BEAMS UCL |
| URI: | https://discovery.ucl.ac.uk/id/eprint/10154224 |
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