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| Author: | Theissen, E. |
| Title: | Underpricing und Anlegerdiskriminierung bei Aktienemissionen |
| Journal: | Zeitschrift für Betriebswirtschaft
2002 : OCT, VOL. 72:10, p. 1025-1044 |
| Index terms: | PRICING SHARES ALLOCATION MODELS |
| Language: | ger |
| Abstract: | In the recent "hot IPO market", the allocation of shares among different groups of subscribers has often been criticized as "unfair". There is indeed evidence that investors are not always treated equally. It is not a priori clear, however, that discretionary allocation is undesirable from an economic point of view. The authors extent a simple version of Rock's (1986) winner's curse model to show that unequal allocation among subscribers may increase the magnitude of the Underpricing. The authors then address the issue empirically and show that unequal allocation is empirically relevant. The authors further document that unequal treatment of different groups of subscribers is indeed associated with higher Underpricing. |
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