Using a unique Korean initial public offering bookbuilding dataset, this study examines the impacts 
    of presales to institutions and premarket interest on institutional bidding decisions, and makes the 
    following observations. First, there is no significant relationship between presales and bidding 
    decisions. This can be attributed to the fact that Korean underwriters offer institutions more 

    allocations of less underpriced shares. Second, institutions become more willing to bid aggressively, 

    as premarket interest increases. Third, institutional incentive to submit aggressive bids is positively

    related to underwriter pricing discretion. Fourth, bidding strategies are conditional on the different

    degrees of pricing discretion. Overall, this study’s evidence concludes the endogeneity of institutional

    bidding decisions in premarket auctions.