Research seminar by Yuri Khoroshilov (University of Ottawa): «Signalling in Takeover Auctions with Flexible Reserve Price»

On Thursday, October 6 at 4.30 pm International College of Economics and Finance held Research seminar.
Venue: Pokrovski Bulvar, 11, Room Zh-822
Speaker: Yuri Khoroshilov  (University of Ottawa)
Theme: «Signalling in Takeover Auctions with Flexible Reserve Price»

Abstact: This paper overcomes the non-existence of the signalling equilibrium in auctions with flexible reserve price result shown in previous studies. It presents a takeover auction model in which the acquirer can obtain additional information during the course of the auction and the target firm can change its reserve price. It shows that the threat of extra information acquisition and inability of the target firm to commit to a fixed reserve price prevent the target from ripping all of the expected acquisition surplus from the acquirer. The latter reduces the potential costs of signalling and allows the acquirer to use jump bidding to signal her value in order to deter competition.

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