Options on Stock Indices, Precious Metals Debt, and Foreign Currency: Tests of Boundary Conditions and Pricing Models

Warren Bailey

University of California at Los Angeles, Anderson Graduate School of Management from Anderson Graduate School of Management, UCLA

Abstract: This paper presents a model of bidding strategies in takeovers in which initially uninformed bidders must incur costs to learn their valuations of a target. In the case the the bidders' valuations are independent, the first bidder may make a pre-emptive bid, well above the market price of the shares-he does so o deter the second bidder from investigating. In the case that the bidders' valuations are common, the first bidder may bid low to conceal favourable information. I also investigate the relation between the price at which the target is taken over and he cost of investigation of the second bidder.

Date: 1985-03-01
References: Add references at CitEc
Citations:

Downloads: (external link)
https://www.escholarship.org/uc/item/01p8t8s4.pdf;origin=repeccitec (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:cdl:anderf:qt01p8t8s4

Access Statistics for this paper

More papers in University of California at Los Angeles, Anderson Graduate School of Management from Anderson Graduate School of Management, UCLA Contact information at EDIRC.
Bibliographic data for series maintained by Lisa Schiff ().