Published April 2010
| Submitted
Journal Article
Open
Code Creation in Endogenous Merger Experiments
- Creators
- Feiler, Lauren
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Camerer, Colin F.
Chicago
An error occurred while generating the citation.
Abstract
We study the conflict that can occur in a merger due to firms' use of specialized language, or "code," and whether participants accurately forecast this difficulty. After creating a shared code to describe different pictures accurately, subjects bid for extra payments to join a merged group. The two lowest bidders are placed in the merged group. Values inferred from two different bidding procedures indicate fairly accurate general appraisals of the cost of the merger, but the values of those subjects who bid the least, and choose to join the merged group, are too optimistic, reflecting an "organizational winner's curse."
Additional Information
© 2009 Western Economic Association International. Article first published online: 16 Oct. 2009. This research was supported by an NSF and Betty and Gordon Moore Foundation grant to Colin Camerer. We are grateful to Galen Loram, Ming Hsu, Joseph Wang, and programmers Charlie Hornberger and John Lin for going beyond the call of duty to make sure this project worked. We also benefited from helpful discussions with Preston McAfee, Simon Wilkie, Jacob Goeree, and Paul Healy, two anonymous referees, and comments from audiences at Caltech, Chicago GSB, ESA, and the Behavioral Organizational Economics meeting at MIT.Attached Files
Submitted - codecreation_feb2006_1_.pdf
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codecreation_feb2006_1_.pdf
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Additional details
- Eprint ID
- 21997
- Resolver ID
- CaltechAUTHORS:20110204-074155951
- NSF
- Gordon and Betty Moore Foundation
- Created
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2011-06-23Created from EPrint's datestamp field
- Updated
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2021-11-09Created from EPrint's last_modified field