NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Initial Public Offerings: Investor Behavior and Underpricing

Robert J. Shiller

NBER Working Paper No. 2806*
Issued in March 1989
NBER Program(s):   ME

A questionnaire survey of investors in initial public offerings (IPO's) was undertaken to learn about patterns of investor behavior that might be relevant to theories of their underpricing. Respondents were asked for their perception of the allocation process, their concern with stockbroker or underwriter reputation, their theories of IPO underpricing, and their communications and information sources. Results are interpreted as supporting the notion that there is an element of truth in some existing theories of IPO underpricing. and also suggesting different hypotheses. The impresario hypothesis is that underwriters deliberately underprice to obtain publicity and promote enthusiasm. Other hypotheses suggested by the results are an investor risk perception hypothesis and a fairness-relationship hypothesis.

You may purchase this paper on-line in .pdf format from SSRN.com ($5) for electronic delivery.

Information about Free Papers

You should expect a free download if you are a subscriber, a corporate associate of the NBER, a journalist, a site with your domain name in ".GOV", or a resident of nearly any developing country or transition economy.

If you usually get free papers at work/university but do not at home, you can either connect to your work VPN or proxy (if any) or elect to have a link to the paper emailed to your work email address below. The email address must be connected to a subscribing college, university, or other subscribing institution. Gmail and other free email addresses will not have access.

E-mail:

Machine-readable bibliographic record - MARC, RIS, BibTeX

 
Publications
Activities
Meetings
Data
People
About

National Bureau of Economic Research, 1050 Massachusetts Ave., Cambridge, MA 02138; 617-868-3900; email: info@nber.org