Abstract: On the objective of maximizing the institutional investors' expected utility,this paper works out their optimal bidding strategies under two difference bookbuilding regulations that is,to decide the institutional investors' IPO allocation shares before and after their bidding.Furthermore,we establish the IPO pricing and underpricing models.Our analysis indicates that institutional investors have incentive to shade their demands in order to avoiding the "Winner's Curse" and pursuing higher expected IPO underpricing.Supply uncertainty could prohibit the extreme demand reduction and eliminate some high underpricing section which may exist under the condition of certain supply,So,it has higher IPO bookbuilding efficiency.

Key words: bookbuilding, IPO underpricing, allocation regulation, demands shading