Organizations & Markets

This article examines the use of share repurchase as a takeover deterrent. The main result is that in the presence of an upward-sloping supply curve for shares, the takeover cost to the acquirer can be greater if the target firm distributes cash through share repurchase than if it chooses either to pay a cash dividend or to do nothing. Because shareholders willing to tender the distribution of remaining shareholders toward a more expensive pool. Examining the equilibrium behavior of all players in a stylized takeover game, conditions exist under which repurchase deters takeover.

The nature of supply curves in corporate equity are examined. Until recently, there has been little direct empirical assessment of their elasticity. At issue is whether or not the supposition of shareholder homogeneity of valuations represents a good approximation to actual markets. In Bagwell (1990), supply curves documented in Dutch auction repurchases have a distinct upward slope. Shleifer (1990) also provides evidence of an upward-sloping supply curve.

A conceptual model is developed that describes the relationships among consumer values, utility, and ownership of durables. These relationships are tested empirically using data on a variety of discretionary durables collected from a sample of 735 adults. Results support the model structure and suggest that augmenting the List of Values (Kahle 1983) with a measure of materialism improves prediction of value-related consumer behavior.

In this paper we investigate whether the level of earnings divided by price at the beginning of the stock return period is relevant for evaluating earnings/returns associations. The primary model motivating this research relies on the idea that book value (owners' equity) and market value are both "stock" variables indicating the wealth of the firm's equity holders. The related "flow" variables (after adjusting for dividends) are, respectively, earnings divided by price at the beginning of the return period (A/P-1) and market returns.

Japan's capital markets have played a crucial role in the recent increase in the globalization of international capital markets. As a result it has become important to understand the similarities and differences in the way Japanese markets operate in comparison to the more familiar Anglo-American environment. One of the major differences that has attracted a great deal of attention is the relatively high average price/earnings [PE] ratio (Viner [1988]) for the stocks listed on the Tokyo Stock Exchange.

Observers viewed random-dot optical flow displays that simulated self-motion on a circular path and judged whether they would pass to the right or left of a target at 16 m. Two dots in 2 frames are theoretically sufficient to specify circular heading if the orientation of the rotation axis is known. Heading accuracies were better than 1.5° with a ground surface, wall surface, and 3-dimensional cloud of dots and were constant over densities down to 2 dots, consistent with the theory.

A number of issues that relate to the desirability and implications of new venture financing are examined within a principal-agent framework that captures the essence of the relationship between entrepreneurs and venture capitalists. The model suggests: (1) As long as the skill levels of entrepreneurs are common knowledge, all will choose to involve venture capital investors, since the risk sharing provided by outside participation dominates the agency relationship that is created.

This article provides confirmatory evidence of the value-relevance of book values of oil and gas properties. Harris and Ohlson (1987) find that the book values correlate significantly with the inferred market values of oil and gas properties. Reserve recognition accounting requires the simultaneous publication of alternative measures that are often assumed to be more relevant values of the oil and gas properties.