The Game of Going Public: Market Timing, Information Asymmetry, and the Signaling Effects of Initial Public Offerings (IPOs) in the Technology Industry

My thesis explores the game of going public in the technology industry, specifically the strategic decision-making process of issuing an initial public offering (IPO), the advantages a company may gain from its market timing, and the signaling effects of its IPO. Existing research on this subject is vast but fragmented into areas that focus on the decision to go public, game theoretical analysis of the advantages, analysis of the advantages using quantitative data, and signaling effects. To address this gap, I developed and analyzed three game theoretic models which account for all these factors that affect the success of an IPO. So, my research question is: under what conditions do Nash equilibria exist where a technology company would have a first- or second-mover advantage, and how are these advantages affected by information asymmetry and signaling effects? The results demonstrate that Nash equilibria exist where a company may gain a first- or second-mover advantage, but Nash equilibria also exist when a company prefers to stay private. These findings are particularly relevant in the technology industry as they provide insights into an IPO's strategic process and success, which is significantly shaped by the costs of going public.