Optimal Degree of Public Information Dissemination

Arbeitspapier

Financial markets and macroeconomic environments are often characterized by positive externalities. In these environments, transparency may reduce expected welfare from an ex-ante point of view: public announcements serve as a focal point for higher-order beliefs and affect agents' behaviour more than justified by their informational contents. Some scholars conclude that it might be better to reduce the precision of public signals or entirely withhold information. This paper shows that public information should always be provided with maximum precision, but under certain conditions not to all agents. Restricting the degree of publicity is a better-suited instrument for preventing the negative welfare effects of public announcements than restrictions on their precision are.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: SFB/TR 15 Discussion Paper ; No. 158

Classification and Topics

• Classification: Wirtschaft ; Stochastic and Dynamic Games; Evolutionary Games; Repeated Games ; Asymmetric and Private Information; Mechanism Design ; Foreign Exchange
• Subject: Transparency ; public information ; private information ; coordination ; strategic complementarity

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Cornand, Camille ; Heinemann, Frank
• Event: Veröffentlichung
• (who): Sonderforschungsbereich/Transregio 15 - Governance and the Efficiency of Economic Systems (GESY)
• (where): München
• (when): 2006

Further information

• DOI: doi:10.5282/ubm/epub.13393
• Handle: http://hdl.handle.net/10419/94054
• URN: urn:nbn:de:bvb:19-epub-13393-6
• Last update: 10.03.2025, 11:41 AM CET