Graduation Year


Date of Submission


Document Type

Campus Only Senior Thesis

Degree Name

Bachelor of Arts



Reader 1

Benjamin Gillen

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2020 Colton C Smith


This study analyzes the prevalence of the winner’s curse in the mergers and acquisitions market using Post-Great-Recession data. To analyze the prevalence of this phenomena, I calculate cumulative abnormal returns over four event windows: at time zero when the transaction occurs, and six, twelve, and twenty-four months’ post-transaction. I also calculate normal returns through each of these periods to use as a benchmark for the cumulative abnormal returns. I then tested whether industry (broken down by NAICS code) and experience (whether a firm has engaged in multiple transactions through our sample period) have an effect on the cumulative abnormal returns, and therefore the prevalence of the winner’s curse, of firms after a merger or acquisition. The results of this study show that experience and most industries do not have a statistically significant impact on cumulative abnormal returns. These results show that the winner’s curse is still extremely prevalent in the mergers and acquisitions market as average cumulative abnormal returns are overwhelmingly negative in all regressions ran and samples pulled.

This thesis is restricted to the Claremont Colleges current faculty, students, and staff.