Game Analysis Of China's A-share Market Ipo Underpricing

IPO Underpricing is a kind of phenomenon in the stock market that is the price of the stock in the issue market is higher than that of the exchange market. It is a common thing in the stock market all over the world, especially in China.IPO Underpricing causes a lot of problems in the financial market. It disturbs the exchange market so that it can't run stably, aggravates the instability of finance,causes the inefficiency of capital arra,nge,goes against building up the rational investing concept of invester,harms the benefit of invester. So it is important to settle this problem.This thesis studies the phenomenon of IPO Underpricing in Chinesestock market,with a method of game theory. It analyzes the cause of the phenomenon from an angle of the game between the main bodies of the market It gives several suggestions to solve the problem. This thesis puts forward three game models .including the game between the issuer and the stock seller, the issuer and the invester, the government and the group constituted of issuer, the stock seller and the invester. The conclusions are as follows:(1)The rate of IPO Underpricing won't reduce unless the income of the excellent company is higher than the bad company when they come into the market. The high rate of IPO Underpricing in our country shows that,with the asymmetry of information, the income of the excellent company is not higher than the bad company when they come into the market, and the stock seller can't select the excellent company. To reduce The rate of IPO Underpricing, it is necessary to make the price reflect the the information of the investers' demands(2)IPO underpricing is caused by the pooling equilibrium. It is the result of the unwitting at the end of the pressure of high-quality companies to determine a priori probability in the case of asymmetric information. To balance the separation of the pricing results, it is necessary to loosen its control of the securities market level, and focus on the regulatory mandatory disclosure of information up.(3)To solve the problem of IPO underpricing, it is necessary to change the situation of asymmetric information, so we need to improve the regulatory system andpolicies. The suggestions are as follows: strengthing information disclosure system;expanding the size of the market; improving the quality of the issuer; strengthinggovernment regulation, reducing insider trading; improving the corporate governancestructure.