9781118041581

Summary 657 Genzyme’s own assessment of its intrinsic value was in sharp conflict with Sanofi’s view. Earnings were recovering, ...

The zone of agreement lies between the parties’ values for the transaction (assessed relative to what each would get in a disag ...

Summary 659 Questions and Problems A plaintiff is suing a defendant for $100,000. The cost of going to court is $15,000 for eac ...

An upstream paper mill releases moderate amounts of pollutants into a waterway. A downstream fishery suffers an economic cost f ...

Summary 661 B’s Values S’s Costs 3 Years 5 Years 3 Years 5 Years 95% 180 100 140 80 80% 160 60 90 50 No biochemists 00 00 Bioche ...

c. The firms are considering a provision in the acquisition allowing T’s senior managers (who will continue to work for the comb ...

Summary 663 In December 2005, Time Warner (TW) was the subject of two different news stories. Its AOL division was pursuing an ...

negotiate an agreement with the first, and, if this fails, go on to the second, and so on. There is no cost to approaching a new ...

Summary 665 remaining three cells. The placement of the 1 (a so-called dummy variable) specifies the exact agreement. For instan ...

Suggested References The following books offer practical guides to reaching mutually beneficial agreements. Bazerman, M. H., and ...

Summary 667 A transaction is possible if and only if firm A (the buyer) is more optimistic that the bill will be defeated (and, ...

Bidding to Televise the Olympics 668 CHAPTER 16 Auctions and Competitive Bidding Two rules for succeeding in business: (1) Never ...

Auctions and Competitive Bidding 669 payment plus two-thirds of any gross advertising revenues in excess of $600 million (up to ...

and higher bids, and the last and highest bid claims the item. The English auc- tion enjoys a secure place in a bewildering vari ...

The Advantages of Auctions 671 Roughly speaking, auctions occupy a middle ground between posted pric- ing and negotiated prices. ...

A simple expected-value analysis identifies the optimal offer as $70. With this offer, the firm earns a profit of $130 million, ...

The Advantages of Auctions 673 sell its division at the highest possible price. The division is worth $40 mil- lion under the co ...

BIDDER STRATEGIES A firm’s optimal bid in a given situation depends on many factors: its value for the good at auction, its asse ...

dominant strategy is to bid its true reservation price. For instance, if you believe a Persian rug up for bid is worth $800, thi ...

Google’s automated auction method is called a Generalized Second Price auction or GSP and works like this. Suppose a number of o ...