THE increasing separation of corporate ownership from managerial control has provided a fertile environment for theories regarding both executive conduct [i; I I; 12; I7] and corporate financial performance [4; 8; 9]. This paper addresses the general question raised by Adam Smith in the above quote as to whether 'Negligence and profusion. . .' is a consequence of the separation of ownership and control in firms. However, unlike previous studies that have examined the effect of owner-control versus manager- control on overall performance (e.g. profit, growth), this paper examines a specific type of corporate behavior-merger pricing policies-in firms classi- fied as owner-controlled or manager-controlled