GOVERNMENT-REGULATION AND STRUCTURAL-CHANGE IN THE CORPORATE ACQUISITIONS MARKET - THE IMPACT OF THE WILLIAMS ACT

This paper presents evidence on how the Williams Act affected the corp orate acquisitions market. The acquisition process is modeled and thre e hypotheses about the Act's effects are discussed. These hypotheses i mply differing restrictions on how the Act changes the model's paramet ers. Parameter changes are estimated but we are unable to reliably dis criminate between two of the three hypotheses using the classical stat istical testing approach, though the third hypothesis is reliably reje cted. Bayesian analysis using a diffuse prior is employed to make form al probability comparisons among the hypotheses. The most probable hyp othesis, according to the results, implies that the Williams Act reduc ed the expected gross present value of acquisition attempts.