%0 Journal Article %T Start-ups, incumbents, and the effects of takeover competition %A Becker, Jan U. %A Clement, Michel %A Nöth, Marcus %D 2016 %J Journal of Business Research %@ 0148-2963 %N 12 %V 69 %P 5925–5933 %! Becker, Clement et al. 2016 – Start-ups, incumbents %R 10.1016/j.jbusres.2016.05.005 %X Recent acquisitions involving Tumblr and Instagram have demonstrated that the takeover of an unlisted start-up company can offer enormous financial benefits to its (former) stakeholders. Considering the multimillion-dollar amounts paid for start-ups with no existing and highly uncertain future revenues, we investigate the process and outcome of negotiation dynamics in the context of takeovers. In a series of experiments, we show that even with a low level of uncertainty about a start-up's value and its financial resources, start-ups can influence bidders' behavior and consequently the start-ups' valuation. The results indicate that incumbents' bidding behavior is driven by the perceived threat level with respect to the start-up's business activities as well as by the uncertainty with respect to other incumbents' bidding behavior—drivers that are subject to activities by the start-ups' management. Interestingly, the effect even exists if incumbents clearly know that initiating a bidding process will very likely lead to losses.