Mergers and acquisitions help companies grow by buying new capabilities. This study looked at how emotions like risk aversion and optimism affect the pricing of these deals. They used a model to show that when the buyer is risky and the seller is optimistic, the price goes up. But if the buyer is less scared of losing money, the price goes down. They looked at real mergers like Verizon with AOL and Yahoo, and found that the model's predictions matched up. Having multiple buyers also raises the price, with fear of losing money being the biggest factor.