IPO Pricing Analysis Based on Institutional Investors Irrational Quotation

摘要

This paper is a study of the institutional investors' irrational bidding behavior. Under the rational issuer assumption, we establish a model and analyze the IPO price setting and institutions allocation under different value signals. Through analysis, we found that when the institutions have good value information, the issuer's offering constraint mechanism is effective; when they have bad information, quotation constraint mechanism entire uselessness, they would deliberately convey informative or good signals , causing the IPO price higher than its value.