Performance Deviations and Acquisition Premiums

Overview

This paper examines the intersection of CEO celebrity and managerial risk-taking in the context of corporate acquisitions. Published in the Strategic Management Journal, it demonstrates that CEO celebrity status systematically influences acquisition behavior — celebrity CEOs pay higher premiums, and this effect intensifies after performance deviations.

Contribution to the Research Program

This work contributes to understanding how cognitive and social factors influence high-stakes decision-making under uncertainty, connecting to the lab's broader interest in the limits of rational decision-making.