Earnouts in mergers and acquisitions: a game-theoretic option pricing approach

DOI10.1016/j.ejor.2012.05.017zbMath1253.91198OpenAlexW2055392478MaRDI QIDQ1927012

Elmar Lukas, Jeffrey J. Reuer, Andreas Welling

Publication date: 29 December 2012

Published in: European Journal of Operational Research (Search for Journal in Brave)

Full work available at URL: https://doi.org/10.1016/j.ejor.2012.05.017

zbMATH Keywords

game theoryreal optionsdecision analysisoptimal investment timingmergers and acquisitionscontingent earnouts

Mathematics Subject Classification ID

Applications of game theory (91A80) Financial applications of other theories (91G80)

Related Items (8)

Optimal exercise of jointly held real options: a Nash bargaining approach with value diversion ⋮ Venture capital, staged financing and optimal funding policies under uncertainty ⋮ Heterogeneous beliefs and optimal ownership in entrepreneurial financing decisions ⋮ Mergers and acquisitions between risk-averse parties ⋮ A real options game of alliance timing decisions in biopharmaceutical research and development ⋮ Real options in operations research: a review ⋮ Optimal contingent payment mechanisms and entrepreneurial financing decisions ⋮ Target-initiated takeover with search frictions

Cites Work

• Optimal access pricing for natural monopoly networks when costs are sunk and revenues are uncertain
• The impact of investment lags on investment decision
• Uncertainty and stepwise investment
• Evaluating leases with complex operating options
• The option value of advanced R\&D
• Market entry, phased rollout or abandonment? A real option approach
• The impacts of uncertainties in a real options model under incomplete information
• The Bargaining Problem
• Real (investment) options with multiple sources of rare events

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