Beyond the Rational Behavior: The Non-Financial Variables That Condition Shareholders' Actions on a Takeover

Forthcoming, Journal of Economic Policy Reform, DOI: 10.1080/17487870.2017.1316504.

29 Pages Posted: 31 May 2017

See all articles by Rosa M. Mayoral

Rosa M. Mayoral

University of Valladolid

Eleuterio Vallelado

University of Valladolid; University of Valladolid

Date Written: May 25, 2017

Abstract

This article provides experimental evidence that bidder and target shareholders of a takeover announcement exhibit differences in their actions explained by individual traits and by the environment in which investors must decide. These variables should be considered when designing an adequate investor protection policy. Before the crisis, investor protection regulation was based on the rational behaviour hypothesis and characterized by an overreliance on disclosure and financial literacy strategies. However, the new European policy on financial services has acknowledged the lack of adequate protection, and has increased transparency and access to information for investors in MIFID II and MiFIR.

Keywords: Investor Protection Policy, Decision-Making, Takeover, Cognitive Model

JEL Classification: D83, G14, G34

Suggested Citation

Mayoral, Rosa M. and Vallelado, Eleuterio, Beyond the Rational Behavior: The Non-Financial Variables That Condition Shareholders' Actions on a Takeover (May 25, 2017). Forthcoming, Journal of Economic Policy Reform, DOI: 10.1080/17487870.2017.1316504., Available at SSRN: https://ssrn.com/abstract=2974304

Rosa M. Mayoral

University of Valladolid ( email )

Avda. Valle Esgueva 6
Valladolid, 47011
Spain
+34 983 42 33 34 (Phone)
+34 983 18 64 84 (Fax)

Eleuterio Vallelado (Contact Author)

University of Valladolid ( email )

Avda. Valle Esgueva 6
47011 Valladolid, 47011
Spain
983423387 (Phone)
983186484 (Fax)

HOME PAGE: http://eleuteriovallelado.blogs.uva.es/

University of Valladolid ( email )

8 C/Plaza de Santa Cruz
Valladolid, Valladolid 47002
Spain
+34983423387 (Phone)

HOME PAGE: http://eleuteriovallelado.blogs.uva.es/

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