This figure details the stage-game that underlies the two activist-manager interactions that comprise our model. The payoffs for each of the three possible outcomes are described, in detail, in the Model section.
This figure presents a histogram of the dollar value of the activist's position in the target for campaigns resulting in a proxy fight. We define an activist campaign resulting in a proxy fight based on proxy filings with the SEC by both activist and target, as described in the Data Section. Of the activist campaigns in our sample, 96 result in proxy fights. The data include activist campaigns initiated between 2000-2014.
In this figure, we show that the majority of proxy fights occur in campaings in which the activist purchases a stake smaller than \$50 million. This indicates that the activist is not likely to recoup the costs related to the proxy fight in the campain, which suggests that activist often engage in proxy fights with the view that these costs will be recouped by long-term benefits of reputation.