000			02630cam a22003497 4500
001			w12151
003			NBER
005			20211020112322.0
006			m o d
007			cr cnu||||||||
008			210910s2006 mau fo 000 0 eng d
100	1		_aJagannathan, Ravi. _913498
245	1	0	_aWhy Do IPO Auctions Fail? / _cRavi Jagannathan, Ann E. Sherman.
260			_aCambridge, Mass. _bNational Bureau of Economic Research _c2006.
300			_a1 online resource: _billustrations (black and white);
490	1		_aNBER working paper series _vno. w12151
500			_aApril 2006.
520	3		_aWe document a somewhat surprising regularity: of the many countries that have used IPO auctions, virtually all have abandoned them. The common explanations given for the lack of popularity of the auction method in the US, viz., issuer reluctance to try a new experimental method, and underwriter pressure towards methods that lead to higher fees, do not fit the evidence. We examine why auctions have failed and verify, to the extent possible, that they are consistent with what academic theory predicts. Both uniform price and discriminatory auctions are plagued by unexpectedly large fluctuations in the number of participants. The free rider problem and the winner's curse hamper price discovery and discourage investors from participating in auctions. Calculating the optimal bids in large multi-unit common value auctions with endogenous entry imposes a huge computational burden. With IPOs taking place sporadically, and each firm being different, auctions are likely to end up being unstable.
530			_aHardcopy version available to institutional subscribers
538			_aSystem requirements: Adobe [Acrobat] Reader required for PDF files.
538			_aMode of access: World Wide Web.
588	0		_aPrint version record
690		7	_aG24 - Investment Banking • Venture Capital • Brokerage • Ratings and Ratings Agencies _2Journal of Economic Literature class.
690		7	_aG28 - Government Policy and Regulation _2Journal of Economic Literature class.
690		7	_aG32 - Financing Policy • Financial Risk and Risk Management • Capital and Ownership Structure • Value of Firms • Goodwill _2Journal of Economic Literature class.
700	1		_aSherman, Ann E. _920655
710	2		_aNational Bureau of Economic Research.
830		0	_aWorking Paper Series (National Bureau of Economic Research) _vno. w12151.
856	4	0	_uhttps://www.nber.org/papers/w12151
856			_yAcceso en línea al DOI _uhttp://dx.doi.org/10.3386/w12151
942			_2ddc _cW-PAPER
999			_c335981 _d294543