Explaining the Premiums Paid for Large Acquisitions: Evidence of CEO Hubris

@article{Hayward1997ExplainingTP,
  title={Explaining the Premiums Paid for Large Acquisitions: Evidence of CEO Hubris},
  author={Mathew L. A. Hayward and D. Hambrick},
  journal={Administrative Science Quarterly},
  year={1997},
  volume={42},
  pages={103-127}
}
  • Mathew L. A. Hayward, D. Hambrick
  • Published 1997
  • Business
  • Administrative Science Quarterly
  • We thank Mark Sirower for bringing Buffett's remarks to our attention. This study examines the role of a chief executive officer's hubris, or exaggerated self-confidence, in explaining the large size of some premiums paid for acquisitions. In a sample of 106 large acquisitions, we found that four indicators of CEO hubris are highly associated with the size of premiums paid: the acquiring company's recent performance, recent media praise for the CEO, a measure of the CEO's self-importance, and a… CONTINUE READING
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