GONDAT-LARRALDE, CÉLINE; JAMES, KEVIN R. - In: Journal of Finance 63 (2008) 1, pp. 449-478
Since an underwriter sets an IPO's offer price without knowing its market value, investors can acquire information about its value and avoid overpriced deals ("lemon-dodge"). To mitigate this well-known risk, the bank enters into a repeat game with a coalition of investors who do not lemon-dodge...