Game Analysis of Effect of Shares Allocation Right on Inquiry Efficiency

Abstract:

Based on analysis of the behavior of the underwriter who has the right of allocation and the two kinds of inquirers who will give exceeding price,a dynamic state model is established.The model,is used to identify the equilibrium relationship among the influence of the right of allocation,the aim of underpricing level and the inquiry interval.The game and mathematical analysis of this model indicates that the exceeding price can be averted by giving the right of allocation to the underwriter,the aim of underpricing level achieved and the efficiency of inquiry realized.

Key words:right of allocating shares; efficiency of inquiry; underpricing level