CORPORATE TAKEOVERS IN THE LABORATORY WHEN SHAREHOLDERS OWN MORE THANONE SHARE

Tendering decisions of shareholders endowed with multiple shares are s tudied in the laboratory to test,game-theoretic models of the tenderin g process. Tendered shares cycle around the equilibrium level. Contrar y to game-theoretic predictions, bid level and bid type affect the num ber of shares tendered and the bid success rate. When players are give n unequal endowments of shares, an equal proportion strategy organizes the data better than Holmstrom and Nalebuff's symmetric focal equilib rium in which larger shareholders tender down to a common share level. However, large shareholders often tender proportionately more shares than small shareholders.