Working Paper No. 777

Getting a Better Price: Strategic Behavior before Changes in Ownership of Corporate Assets

Published: November 13, 2008Pages: 34Keywords: Mergers & Acquisitions; Ownership; Auctions; Strategic Investments; Merger EvaluationsJEL-codes: L13; L40; L66
Published version

Getting a Better Price: Strategic Behavior before Changes in Ownership of Corporate Assets Richard Friberg, Pehr-Johan Norbäck and Lars Persson

We propose a model of investments prior to corporate ownership changes. We derive conditions under which the selling of a firm triggers overinvestment by both the seller and the buyer prior to the asset transfer. In a setting with Cournot competition, we show that these incentives can drive the consumer prices in a post-acquisition duopoly below those of an ongoing triopoly. Our analysis warns against a mechanical use of pre-merger benchmarks in ex post merger evaluations.

Pehr-Johan Norbäck


Ph: +46 8 665 4522
Mob: +46 73 547 3379

Lars Persson


Ph: +46 8 665 4504

Sick of Inequality?

An Introduction to the Relationship between Inequality and Health

Sick of Inequality.jpg

In this book Andreas Bergh, Therese Nilsson, IFN and Lund University, and Daniel Waldenström, IFN and Paris School of Economics, France, review the latest research on the relationship between inequality and health. What does inequality mean for our health? Does increasing income inequality affect outcomes such as obesity, life expectancy and subjective well-being?


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