The Hubris Hypothesis of Corporate Takeovers Author(s): Richard Roll Source: The Journal of Business, Vol. 59, No. 2, Part 1 (Apr., 1986), pp. 197-216 Published by: The University of Chicago Press Stable URL: http://www.jstor.org/stable/2353017 Accessed: 10/02/2010 10:10
Your use of the JSTOR archive indicates your acceptance of JSTOR's Terms and Conditions of Use, available at http://www.jstor.org/page/info/about/policies/terms.jsp. JSTOR's Terms and Conditions of Use provides, in part, that unless you have obtained prior permission, you may not download an entire issue of a journal or multiple copies of articles, and you may use content in the JSTOR archive only for your personal, non-commercial use. Please contact the publisher
…show more content…
It is a pleasureto acknowledgethe benefitsderivedfrom the generosity of so many colleagues. They corrected several conceptualand substantiveerrors in the previous draft, directed my attentionto other results, and suggestedother interpretationsof the empiricalphenomena. In general, they provided me with an invaluable tutorial on the subject of corporatetakeovers.The presentdraftundoubtedly constill tainserrorsandomissions,but this is due mainlyto my inability to distill and convey the collective knowledgeof the profession. Among those who helped were C. R. Alexander, Peter Bernstein, Thomas Copeland, Harry DeAngelo, EugeneFama, KarenFarkas,MichaelFirth, MarkGrinblatt, Gregg Jarrell, Bruce Lehmann, Paul Malatesta, Ronald Masulis, David Mayers, John McConnell, Merton Miller, StephenRoss, RichardRuback,SheridanTitman,and, especially, MichaelJensen, KatherineSchipper,WalterA. Smith, Jr., and J. Fred Weston. I also benefitedfrom the comments of the finance workshop participantsat the University of Chicago, the University of Michigan, and DartmouthCollege, and of the referees.
(Journal of Business, 1986, vol. 59, no. 2, pt. 1) ? 1986 by The University of Chicago. All rights reserved. 002 1-9398/86/5902-0001$01.50 197
The hubris hypothesis is advanced as an explanation of corporate takeovers. Hubris on the part of individual