Abstract: In the view of intentional and unintentional underpricing in IPO underpricing,the paper uses the behavioral finance and game theory,and studies the issuers and institutional investors' heterogeneous and homogeneous expectations how to effect IPO under pricing,and IPO underpricing was analysized.The study result shows that the institutional investors have motivation to suppress the price on whatever condition is to avoid the Winner's Curse and purse higher expected IPO underpricing.When the issuers and institutional investors have no divergence to the IPO value,namely,homogeneous expectation exists, there is only intentional under pricing in IPO underpricing and nounintentional underpricing exists.In versely,it will lead to yield higher IPO underpricing.Moreover,the more divergence,the lager unintentional underpricing but the intentional underpricing is stable.

Key words: heterogeneous expectation, IPO, bookbuilding