The Market for Firms : Market Signaling and Overpricing

@inproceedings{Davis2010TheMF,
  title={The Market for Firms : Market Signaling and Overpricing},
  author={Jerome D. Davis and Hans Keiding},
  year={2010}
}
In this paper, the pricing and sale of firms is approached from the owners’ point of view. It is shown that there are very strong ex ante owner incentives to set prices of firm products or services below their shortterm profit maximizing levels, since low prices signal low costs and as a consequence a higher sales value of the firm. Buyers take this… CONTINUE READING