• Media type: E-Book
  • Title: A Proposal to Restrict Manipulative Strategy in Auction Ipos
  • Contributor: Ganor, Mira [Author]
  • Published: [S.l.]: SSRN, [2004]
  • Extent: 1 Online-Ressource (22 p)
  • Language: Without Specification
  • DOI: 10.2139/ssrn.572243
  • Identifier:
  • Origination:
  • Footnote: Nach Informationen von SSRN wurde die ursprüngliche Fassung des Dokuments July 2004 erstellt
  • Description: Book-building, the prevailing method for IPOs, is widely considered flawed, because it results in stock under-pricing. Auction-IPO, on the other hand, is considered, by conventional wisdom, an alternative method that will eliminate the under-pricing. This paper shows how, contrary to customary belief, auction-IPOs may well result in under-pricing. In auction-IPOs, the under-pricing of the stock price is induced by undetected investors' manipulative strategic behavior. I analyze the requirements for such strategic behavior in a linear model. To reduce investors' incentive to manipulate their bid in the auction, this paper proposes to restrict auction participants from trading in the aftermarket immediately following the IPO
  • Access State: Open Access