Validity of Winner’s Curse Hypothesis: Evidence from Indian Stock Market IPOs during 2017-18
| Vol-4 | Issue-04 | April 2019 | Published Online: 15 April 2019 PDF ( 440 KB ) | ||
| Author(s) | ||
| Shemine Babu 1; Vineeth KM (Dr) 2 | ||
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1PG Scholar, Post Graduate and Research Department of Commerce, Maharaja’s College, Ernakulam, Kerala, India 682011 2Assistant Professor, Post Graduate and Research Department of Commerce, Maharaja’s College, Ernakulam, Kerala, India 682011 |
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| Abstract | ||
The winner’s curse is a tendency for the winning bid in an auction to exceed the intrinsic value or true worth of an item. Because of incomplete information, emotions or any other number of factors regarding the being auctioned, bidders can have a difficult time determining the item’s intrinsic value. As a result, the largest overestimation of an item’s valued ends up winning the auction. This paper examines the validity of Winners’ Curse Hypothesis in Indian IPOs during 2017-18. 40 IPOs during the period are analysed in this aspect and it could be found that Winners’ Curse do exist in the Indian IPOs. It could also be found that there are few sectors resilient of Winners’ Curse and otherwise. |
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| Keywords | ||
| Book Building Initial Public Offerings Winners’ Curse | ||
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