Heterogeneous Beliefs, Market Environment and IPO Underpricing

Author

Zhang, Haifeng ; Zhang, Wei ; Zou, Gaofeng ; Zhang, Yongjie

Author_Institution

Sch. of Manage., Tianjin Univ., Tianjin, China

fYear

2011

fDate

15-19 April 2011

Firstpage

71

Lastpage

75

Abstract

IPO under pricing is always the focus of finance theory and practice. According to behavioral finance, this paper explores the inherent process of IPO under pricing from microscopic investor behavior and market environment by constructing an agent-based computational model. The conclusions show that the uppermost causation for severe IPO under pricing is the presence of crazy investors and hot market environment rather than the beliefs divergence. So it is necessary to strengthen the information disclosure and investors´ education.

Keywords

behavioural sciences; multi-agent systems; pricing; IPO underpricing; agent-based computational model; behavioral finance; heterogeneous beliefs; information disclosure; initial public offerings; investors education; market environment; microscopic investor behavior; Computational modeling; Economics; Finance; Microscopy; Pricing; Protocols; Sensitivity; IPO underpricing; agent-based computational model; heterogeneous beliefs; market environment;

fLanguage

English

Publisher

ieee

Conference_Titel

Computational Sciences and Optimization (CSO), 2011 Fourth International Joint Conference on

Conference_Location

Yunnan

Print_ISBN

978-1-4244-9712-6

Electronic_ISBN

978-0-7695-4335-2

Type

conf

DOI

10.1109/CSO.2011.144

Filename

5957613