Managerial decision, anchoring effects and acquisition premiums

This paper explores the anchoring effect, which is an irrational factor influencing decision-making regarding M&A premiums in M&A events. The study focuses on a sample of M&A transactions conducted by Chinese A-share listed companies between 2007 and 2021. We present significant evidence of the internal anchor anchoring effect in the M&A process in the internal anchor subsample. In the external anchor subsample demonstrates that external anchors have a certain degree of anchoring effects. When both anchors are present, the internal anchor exhibits a more significant anchoring effect compared to the external anchor.