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Value of information in competitive economies with incomplete markets

Gottardi, Piero and Rahi, Rohit (2007) Value of information in competitive economies with incomplete markets. 596. Financial Markets Group, London School of Economics and Political Science, London, UK.

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Abstract

A substantial literature addresses the negative eect on welfare of the release of information in a competitive market economy. We show that the value of information in this setting is typically positive if asset markets are suciently incomplete. More specically, for any competitive equilibrium of a generic economy, we can nd a ner information structure such that an allocation that is resource feasible and measurable with respect to this information ex- post Pareto dominates the given equilibrium allocation.

Item Type: Monograph (Discussion Paper)
Official URL: http://fmg.lse.ac.uk
Additional Information: © 2007 the authors
Library of Congress subject classification: H Social Sciences > HB Economic Theory
Journal of Economic Literature Classification System: D - Microeconomics > D5 - General Equilibrium and Disequilibrium > D52 - Incomplete Markets
D - Microeconomics > D8 - Information, Knowledge, and Uncertainty > D80 - General
D - Microeconomics > D6 - Welfare Economics > D60 - General
Sets: Research centres and groups > Financial Markets Group (FMG)
Collections > Economists Online
Departments > Economics
Collections > LSE Financial Markets Group (FMG) Working Papers
Rights: http://www.lse.ac.uk/library/usingTheLibrary/academicSupport/OA/depositYourResearch.aspx
Identification Number: 596
Date Deposited: 08 May 2008 15:00
URL: http://eprints.lse.ac.uk/4749/

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