Rafael Rogo - Academia.edu (original) (raw)
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Papers by Rafael Rogo
In this paper, I examine the disagreement between the theoretical and empirical literature on the... more In this paper, I examine the disagreement between the theoretical and empirical literature on the superiority of auction over bilateral negotiation as selling mechanism in corporate takeover. I hypothesize that the costs of disclosing proprietary information in auctions need to be o¤set against the well established bene…ts of competition among bidders. This tradeo¤ predicts that targets with valuable proprietary information will choose negotiation to mitigate valuation uncertainty at lower costs and maximize their expected revenue. Speci…cally, I show that the level of valuation uncertainty related to proprietary information is positively associated with the propensity of negotiation. Further I show that litigation concerns and agency problems also drive the mechanism choice. I am grateful to the members of my dissertation committee: Thomas Lys (Chairman), Michael Fishman, Jayanthi Sunder, and Linda Vincent, for their guidance and support. I am also thankful for helpful comments and suggestions from . All remaining errors are mine.
In this paper, I examine the disagreement between the theoretical and empirical literature on the... more In this paper, I examine the disagreement between the theoretical and empirical literature on the superiority of auction over bilateral negotiation as selling mechanism in corporate takeover. I hypothesize that the costs of disclosing proprietary information in auctions need to be o¤set against the well established bene…ts of competition among bidders. This tradeo¤ predicts that targets with valuable proprietary information will choose negotiation to mitigate valuation uncertainty at lower costs and maximize their expected revenue. Speci…cally, I show that the level of valuation uncertainty related to proprietary information is positively associated with the propensity of negotiation. Further I show that litigation concerns and agency problems also drive the mechanism choice. I am grateful to the members of my dissertation committee: Thomas Lys (Chairman), Michael Fishman, Jayanthi Sunder, and Linda Vincent, for their guidance and support. I am also thankful for helpful comments and suggestions from . All remaining errors are mine.