Template-Type: ReDIF-Paper 1.0 Series: Tinbergen Institute Discussion Papers Creation-Date: 2001-09-12 Number: 01-083/1 Author-Name: Moez Bennouri Author-Workplace-Name: Université de Science Économique et Gestion, Tunis Author-Name: Sonia Falconieri Author-Email: sfalconieri@fee.uva.nl Author-Workplace-Name: CREED, University of Amsterdam Title: Price versus Quantity Discrimination in Optimal IPOs Abstract: This paper addresses the issue of the choice of the optimalinstrument to sell new shares, this choice being price versusquantity discrimination (rationing). Previous results in theliterature (Benveniste and Wilhelm, 1990) show that the issuing firmwould be better off if allowed to use both price and quantitydiscrimination. This is not consistent with what we observe inpractice.Using a mechanism design approach, we derive endogenously the optimalIPO mechanism and show that it can be implemented through a uniform priceacross institutional investors and a uniform rationing, whenappropriate. Classification-JEL: D8; G2 Keywords: Initial Public Offering; Price Discrimination; Rationing; Optimal Auction File-Url: https://papers.tinbergen.nl/01083.pdf File-Format: application/pdf File-Size: 302312 bytes Handle: RePEc:tin:wpaper:20010083