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A bargaining model is developed that characterizes the conditions under which a takeover will either be friendly, hostile, or unsuccessful when the target management can tilt the selling procedure toward a white knight. The conditions considered mainly involve private control benefits, toehold size, and breakup fees. Also established by the model are the conditions for an efficient takeover. The proposed framework of strong management influence on takeover outcome, an alternative modeling of hostility and the adoption of a negotiation procedure, rather than an auction setup with strong shareholder influence as in most of the existing literature, delivers new insights into the US market of corporate control, which are consistent with the available evidence

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This brief paper constructs a model of delegated portfolio management in which two agency relationships are characterized. First, a delegation process from investors to fund companies, and second, a delegation from fund companies to fund managers. Career concerns of both agents lead to a churning equilibrium in which uninformed managers trade noisily, and uninformed fund companies are willing to hire these uninformed managers. This equilibrium delivers non-fully informative prices and a positive and high trading volume. Our model then strengths previous explanations to the trade puzzle, predicting an increasing trade activity as long as institutional investors with intense delegation play an increasing role in financial markets.

An important puzzle in …nancial economics is why fund's managers invest in short-maturity assets when they could obtain larger pro…ts in assets with longer maturity. This work provides an explanation for this fact based on the labor contracts signed between institutional investors and fund's managers. Using the career concerns setup, we examine how the optimal contract design, in the presence of both explicit and implicit incentives, a¤ects the fund manager's decisions on investment horizons. Conditions under which young (old) managers prefer short-maturity (long-maturity) positions are stated and the robustness of these results to some extensions is evaluated. Our main …ndings suggest that the framework considered in this work may be a good starting point for explaining episodes of overreaction in stock prices.