Do underwriters compete in IPO pricing?

• Main Authors: LYANDRES, Evgeny, FU, Fangjian, LI, Erica X. N.
• Format: text
• Language: English
• Published: Institutional Knowledge at Singapore Management University 2018
• Subjects: IPOs; underwriters; competition; collusion; Business; Corporate Finance; Finance and Financial Management
• Online Access: https://ink.library.smu.edu.sg/lkcsb_research/4425; https://ink.library.smu.edu.sg/context/lkcsb_research/article/5424/viewcontent/model_underwriters_May_24_2016.pdf
• Institution: Singapore Management University

We propose and implement a direct test of the hypothesis of oligopolistic competition in the U.S. underwriting market against the alternative of implicit collusion among underwriters. We construct a simple model of interaction between heterogenous underwriters and heterogenous firms and solve it und...