Abstract: Under the assumption that the potential demand is uncertain,this paper studis the effect of the behaviors of three main participants in IPO including issuers,institutional investors and retail investors on IPO underpricing by applying the theory of behavioral game. It conducts a comparative analysis of IPO underpricing. The analysis result shows that:when the institutional investors and retail investors have no divergence to the IPO value,there is only intentionally IPO underpricing and IPO underpricing is relatively to w;however,when the institutional investors and retail investors have divergence to the IPO value,there is unconsciously IPO underpricing as well as intentionally IPO underpricing,and IPO underpricing is high. And,the greater the divergence between the main participants of IPO is,the more divergence,and the lager unintentional underpricing there are. Finally,this paper gives an example simulation to quantitatively support its conclusions.

Key words: IPO, underp ricing, behavioral game