Habib, Michel Antoine; Ljungqvist, Alexander P. - C.E.P.R. Discussion Papers - 1998
underpricing in their firms’ Initial Public Offerings (IPOs) by, for example, choosing highly reputable investment bankers as … underwriters. We argue that entrepreneurs can, and will, minimize underpricing, but that they will do so only to an extent that is … States: entrepreneurs will minimize underpricing until their marginal wealth losses equal the marginal cost of reducing …