How does the profile of informational parameters affect the pricing of IPOs?

• Main Authors: En-Chou Lin, 林恩洲
• Other Authors: Tru-Gin Liu
• Format: Others
• Language: zh-TW
• Published: 2014
• Online Access: http://ndltd.ncl.edu.tw/handle/81998472388773583370

碩士 === 國立中山大學 === 經濟學研究所 === 102 === This paper presents a game theory model between underwriters and investors in a IPOs (Initial public offerings) market and discusses pricing strategies by underwriters assuming there are two type of investors, informed and uninformed, in the market which first mentioned by Rock(1986). Depending on the asymmetric information problem between underwriters and investors, there is a possible under pricing equilibrium. We give an idea of how information structure parameters work. Furthermore, whether how the underwriter’s bargaining ability difference between investors and issuers is, we show that given the size of issue and the sink cost while the issue fails as the number of uninformed investors increase or decrease of informed investors, the possibility of IPOs under pricing will increase.