The point the authors seem to be making (haven't read the paper, just read the article) is that this phenomenon of pricing IPOs based solely on "precedent" is l

The point the authors seem to be making (haven't read the paper, just read the article) is that this phenomenon of pricing IPOs based solely on "precedent" is limited to American banks. Another trite phenomenon, competition, seems to be present in Europe, where deals seem to be priced based on novel parameters like demand, risk, size, and financial complexity. Also, if your observation above is in fact correct and investment banks continue basing their pricing on what they've done for the last 20 years, then I wouldn't worry about the government coming in and messing with their business - reliance on logic like "it's how we've always done things" is sure to bring about obsolescence first.