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Landström, Mats
Publications (3 of 3) Show all publications
Hartwig, F., Landström, M. & Sörqvist, P. (2022). Averaging bias in firm acquisition processes. Journal of Behavioral and Experimental Economics, 96, Article ID 101809.
Open this publication in new window or tab >>Averaging bias in firm acquisition processes
2022 (English)In: Journal of Behavioral and Experimental Economics, ISSN 2214-8043, E-ISSN 2214-8051, Vol. 96, article id 101809Article in journal (Refereed) Published
Abstract [en]

When a firm acquires 100% of the shares in another firm and finances this acquisition with available funds, the debt level and return on equity of the two firms in combination goes up (under certain conditions). In three experiments, we empirically demonstrate that individuals intuitively think these variables become lower after the acquisition, contrary to what is actually the case. The findings stress the role of psychological processes in business valuation and accounting and are consistent with an averaging account of judgment under uncertainty. On this view, people's judgments of objects in combination are biased toward the average rather than the sum of the objects’ individual characteristics. The experiments also show that informing the participants of the accurate evaluations removes the bias. The third experiment reinforced these results by replicating the same pattern with a sample of “high-accounting literacy” participants who all reported formal university training in accounting. One takeaway of the study is that, in acquisition settings, investors potentially could base their assessment of firm value on false premises which in turn (at least in the short run) leads to a higher level of asset mispricing and a less efficient capital market.

Place, publisher, year, edition, pages
Elsevier, 2022
Keywords
firm acquisition, debt level, return on equity, averaging bias, cognitive biases
National Category
Business Administration
Research subject
Intelligent Industry
Identifiers
urn:nbn:se:hig:diva-37188 (URN)10.1016/j.socec.2021.101809 (DOI)000731074200002 ()2-s2.0-85120784810 (Scopus ID)
Available from: 2021-10-20 Created: 2021-10-20 Last updated: 2022-01-04Bibliographically approved
Landström, M. (2018). Skatteplanering ur ett nationalekonomiskt perspektiv (1ed.). In: Lind, Y. (Ed.), Rättsliga och ekonomiska reflektioner över internationell skatteplanering: (pp. 44-59). Uppsala: Iustus förlag
Open this publication in new window or tab >>Skatteplanering ur ett nationalekonomiskt perspektiv
2018 (Swedish)In: Rättsliga och ekonomiska reflektioner över internationell skatteplanering / [ed] Lind, Y., Uppsala: Iustus förlag, 2018, 1, p. 44-59Chapter in book (Other academic)
Place, publisher, year, edition, pages
Uppsala: Iustus förlag, 2018 Edition: 1
Keywords
Skatt, skatteplanering, Public Finance, Public Choice
National Category
Economics
Identifiers
urn:nbn:se:hig:diva-28540 (URN)978-91-7678-991-9 (ISBN)
Available from: 2018-11-19 Created: 2018-11-19 Last updated: 2019-08-27Bibliographically approved
Landström, M. (2011). Do Central Bank Independence Reforms Matter for Inflation Performance?. International Journal of Banking, Accounting and Finance, 3(4), 320-335
Open this publication in new window or tab >>Do Central Bank Independence Reforms Matter for Inflation Performance?
2011 (English)In: International Journal of Banking, Accounting and Finance, ISSN 1755-3830, E-ISSN 1755-3849, Vol. 3, no 4, p. 320-335Article in journal (Refereed) Published
Abstract [en]

A difference-in-difference approach was used to investigate whether central bank independence (CBI) reforms matter for inflation, based on a novel dataset including the possible occurrence of such reforms in 132 countries during the period 1980 to 2005. CBI-reforms are found to have contributed to bringing down high inflation rates where those existed, but they seem unrelated to performance in low-inflation countries

Place, publisher, year, edition, pages
InderScience Publishers, 2011
Keywords
Monetary policy; institutional reforms; central banking; price stability; political economy; delegation
National Category
Economics
Identifiers
urn:nbn:se:hig:diva-10423 (URN)10.1504/IJBAAF.2011.043700 (DOI)2-s2.0-84858425507 (Scopus ID)
Available from: 2011-09-26 Created: 2011-09-26 Last updated: 2018-03-13Bibliographically approved
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