Welcome to the new version of CaltechAUTHORS. Login is currently restricted to library staff. If you notice any issues, please email coda@library.caltech.edu
Published February 2011 | Submitted
Journal Article Open

Serial acquirer bidding: An empirical test of the learning hypothesis


Recent academic studies indicate that acquirers' cumulative abnormal returns (CAR) decline from deal to deal in acquisition programs. Does this pattern suggest hubristic CEO behaviors are significant enough to influence average CAR patterns during acquisition programs? An alternative explanation is CEO learning. This study therefore tests for learning using successive acquisitions of large U.S. public targets undertaken by U.S. acquirers. A dynamic framework reveals that both rational and hubristic CEOs take on average investor reactions to their previous deals into account and adjust their bidding behavior accordingly. These results are consistent with a learning hypothesis.

Additional Information

© 2010 Elsevier B.V. Received 10 February 2009, Revised 13 July 2010, Accepted 14 July 2010, Available online 22 July 2010. We are grateful to Jeffry Netter, an anonymous associate editor, and an anonymous referee for their constructive comments. We thank Luc Bauwens, Sandra Betton, Michael Brennan, Estelle Cantillon, Edith Ginglinger, Robert S. Hansen, Nancy Huyghebaert, Bertrand Jacquillat, Tanguy de Launois, Michel Levasseur, Frédéric Lobez, William L. Megginson, Christophe Perignon, Armin Schwienbacher, Evangelos Sekeris, Jean-Christophe Statnik, John Talbott, Walter Torous, Burcin Yurtoglu, and Rebecca Zarutskie, as well as participants at the NFA 2005 conference (Vancouver), the Hasselt 2006 Corporate Finance Day, the EFA 2007 conference (Ljubljana), the AFFI Paris Finance International 2009 meeting, the CORE Econometric seminar, the Dauphine CEREG seminar, the EMLYON Finance seminar, the ESC Lille Finance seminar, and the K.U.Leuven M&A workshop for suggestions and insights. The second author acknowledges the financial support from the University of Lille 2 (Finance, Banking and Accounting Department) and SKEMA Business School.

Attached Files

Submitted - SSRN-id1483595.pdf


Files (232.6 kB)
Name Size Download all
232.6 kB Preview Download

Additional details

August 22, 2023
October 20, 2023