Good disclosure, bad disclosure
By Itay Goldstein, Liyan Yang. Journal of Financial Economics, 2019
231 citations recorded by the source corpus.
We study real-efficiency implications of disclosing public information in a model with multiple dimensions of uncertainty where market prices convey information to a real decision maker. Paradoxically, when disclosure concerns a variable that the real decision maker cares to learn about, disclosure negatively affects price informativeness, and in markets that are effective in aggregating private information, this negative price-informativeness effect can dominate so that better disclosure negatively impacts real efficiency. When disclosure concerns a variable that the real decision maker already knows much about, disclosure always improves price informativeness and real efficiency. Our analysis has important empirical and policy implications for different contexts such as disclosure of stress test information and regulation of credit ratings.
Subfields: Accounting, Economics and Econometrics, Finance
View Paper: https://www.semanticscholar.org/paper/c542faa94ecd0af5a548b03a9d6935c653bc2973
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Citations in the corpus
- Fake news, disinformation and misinformation in social media: a review (2023, background): “…areas and disciplines beyond online social networks and society (García et al. 2020) such as economics (Clarke et al. 2020; Kogan et al. 2019; Goldstein and Yang 2019), psychology (Roozenbeek et al. 2020a; Van der Linden and Roozenbeek 2020; Roozenbeek and van der Linden 2019), political…”