Bookbuilding procedure in someway resembles an auction like, but there are some important differences. The most important difference is that the pricing and allocation rules are not announced, but are left to the discretion of the investment banker. Another difference is that investors' bids do not represent a commitment, but merely an indication of interest. Following the bookbuilding process, the investment banker uses the information to construct a demand curve. The issue price is not set according to any explicit rule, but rather based on the banker's interpretation of investors' indications of interest. However, as an underwriter, they generally set the price at a level at which the demand exceeds supply, and then allocates shares to the bidders at his discretion.