We propose and implement a direct test of the hypothesis of oligopolistic competition in the U.S. underwriting market against the alternative of implicit collusion among underwriters. We construct a simple model of interaction between heterogenous underwriters and heterogenous firms and solve it...

We develop a dynamic model with complete information to study IPO pricing. The model predicts tacit collusion among underwriters and endogenously generates: (1) IPO underpricing; (2) the fluctuation of IPO volume; (3) the time-variation of underpricing in hot and cold markets. In addition, the...