By modeling the market for IPOs as a repeated game with imperfect monitoring, we establish that collusion among underwriters explains the concentration of spreads at 7%, along with other characters of the data on spreads. Furthermore, the structure of optimal spreads in the model explains the...

Characteristics of the investment banking industry, particularly the extreme concentration of spreads at exactly 7%, seem consistent with some form of collusion through which underwriters can extract surplus from the IPO. I present a model of investment banking that, under the assumption of...

Many markets, including markets for IPOs and debt issuances, are syndicated: each winning bidder invites competitors to join its syndicate to complete production. Using repeated extensive form games, we show that collusion in syndicated markets may become easier as market concentration falls,...