Gottardi, Piero and Rahi, Rohit (2014) Value of information in competitive economies with incomplete markets. International Economic Review, 55 (1). pp. 57-81. ISSN 0020-6598
Abstract
We study the value of public information in competitive economies with incomplete markets. We show that generically the welfare effect of a change in the information available prior to trading can be in any direction: There exist changes in information that make all agents better off and changes for which all agents are worse off. In contrast, for any change in information, a Pareto improvement is feasible, that is, attainable by a planner facing the same informational and asset market constraints as agents. In this sense, the response of competitive markets to changes in information is typically not socially optimal.
| Item Type: | Article |
|---|---|
| Official URL: | http://onlinelibrary.wiley.com/journal/10.1111/%28... |
| Additional Information: | © 2014 Economics Department of the University of Pennsylvania and the Osaka University Institute of Social and Economic Research Association |
| Library of Congress subject classification: | H Social Sciences > HC Economic History and Conditions H Social Sciences > HG Finance Z Bibliography. Library Science. Information Resources > ZA Information resources |
| Sets: | Departments > Finance Research centres and groups > Financial Markets Group (FMG) |
| Date Deposited: | 21 Feb 2014 11:18 |
| URL: | http://eprints.lse.ac.uk/55801/ |
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