En studie av prisförhandlingar vid företagsförvärv

Translated title of the contribution: A Study of Price Negotiations in Corporate Takeovers

Henrik Kristensen

Research output: ThesisDoctoral Thesis (monograph)

Abstract

Scholars within the Process school assume that cognitive and motivational aspects within the decision and integration processes may systematically effect the outcome of mergers and acquisitions. More specifically, it has been suggested that decision makers use heuristics for simplifying information processing which may introduce bias. The main aim of the present thesis is to add to the understanding of how offers and counteroffers, and information about a fair price affects the process and outcome of price negotiations in mergers and acquisitions.

The results from five prestudies and one case study showed that norms of fairness may influence takeover negotiations. The head negotiatiors emphasized that they did not tried to buy (sell) to lowest (highest) possible price, but at a juste price. However, it was not possible to disentangle if the parties had an interest in being ”perfectly” fair, or if they had a more ”egoistic” interpretation of fairness.

In order to further investigate whether or not fairness matters in corporate takeovers, simulation experiments was conducted with MBA students. By letting subjects rate their degree of satisfaction with the offered selling prices, it was possible to establish a ”social utility function” which specifies the level of satisfaction with outcomes to oneself and others. The results clearly showed that buyers’ social utility function was affected by information of a fair price. However, it seems like that they were more interested in that them selves were not being treated unfair (steeper decreasing social utility for buying at a price higher than a fair price) than treating others unfairly (flatter increasing social utility for buying at a price lower than a fair price). The behavioral predictions was tested in two additional simulated takeover negotiations. These results clearly showed that the negotiation process and outcome were affected by information about a fair price. More specifically, selling prices were lower when the subjects had received information about a low fair price, and higher when they had information about a high fair price. In addition, as if subjects anchored there counteroffer on the opponents initial offer and insufficiently adjusted from it, buyers first counteroffers were higher and sellers’ first counteroffer lower when the opponent started the negotiation. Furthermore, was the negotiated outcome lower when the buyer started the negotiation.
Translated title of the contributionA Study of Price Negotiations in Corporate Takeovers
Original languageSwedish
QualificationDoctor
Awarding Institution
  • Department of Business Administration
Supervisors/Advisors
  • [unknown], [unknown], Supervisor, External person
Award date1999 May 28
Publisher
ISBN (Print)91-7966-573-X
Publication statusPublished - 1999

Bibliographical note

Defence details

Date: 1999-05-28
Time: 10:15
Place: EC3:207, Ekonomicentrum

External reviewer(s)

Name: Åkerblom, Mats
Title: Docent
Affiliation: Uppsala University

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Subject classification (UKÄ)

  • Business Administration

Keywords

  • reservation price
  • negotiation
  • mergers and acuisitions
  • decision making
  • Acquisition process
  • bias
  • Management of enterprises
  • Företagsledning
  • management

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