Research On The Different Investment-earning Rate Based On The Optimal Mechanism

IPO was initial public offering. IPO investment becomes a popular investing style, because the existence of IPO underpricing. They are always care how can buy the IPO successfully? During the process of IPO, institution investor can obtain more high return new stock, so they can earn more money than retail investor; In other ways, retail investor just can obtain some low return new stock, so they are received"winner's curse". They can be used by institutional investor for arbitrage .That theory was focus on the return of the day 1; fewer people take interest of the different return rate of different type of investor. With the development of finance theory, behavioral theory outstands. This theory provides a useful measure to research the different return rate of different type of investor.This paper takes sight into the different return rate of different type of investors. The research composes by two parts. The first phrase was how the IPO allocate, in this phrase, the optimal mechanism was used, finding the reason of institution's high proportion of new share. In second phrase, the different investment return rate was empirical tested by using the"noise trading model", this phrase was built on the phrase 1.The finding was following: (1) in china stock market,"optimism"was the necessary condition of getting high investment return rate. Moderate optimism makes the things become possible that retail investor having high return rate than institution investor. (2) In order to get max revenue, the underwriter has to give more shares to institution investor. This because the revenue has negative relationship with the stock shares that retail investor has.