Costly Disclosures in a Voluntary Disclosure Model with an Opponent
AbstractThis paper analyzes voluntary disclosure equilibria when the voluntary disclosure model presented inWAGENHOFER (1990) is modified so as to include fixed disclosure costs as used in VERRECCHIA (1983). It turns out that incorporating both disclosure and proprietary costs rules out full disclosure equilibria. Moreover, it yields additional disclosure equilibria that differ significantly from the equilibria in VERRECCHIA (1983) and WAGENHOFER (1990). Thus, in the extended model the firm is provided with additional incentives to withhold its private information from the public.
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Bibliographic InfoPaper provided by Tilburg University, Center for Economic Research in its series Discussion Paper with number 1999-35.
Date of creation: 1999
Date of revision:
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Web page: http://center.uvt.nl
Voluntary disclosure; disclosure costs; proprietary costs;
Find related papers by JEL classification:
- D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
- M49 - Business Administration and Business Economics; Marketing; Accounting - - Accounting - - - Other
This paper has been announced in the following NEP Reports:
- NEP-ALL-1999-05-03 (All new papers)
- NEP-FIN-1999-05-03 (Finance)
- NEP-MIC-1999-05-03 (Microeconomics)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Verrecchia, Robert E., 1983. "Discretionary disclosure," Journal of Accounting and Economics, Elsevier, vol. 5(1), pages 179-194, April.
- Kreps, David M & Wilson, Robert, 1982.
Econometric Society, vol. 50(4), pages 863-94, July.
- Paul R. Milgrom & John Roberts, 1985.
"Relying on the Information of Interested Parties,"
Cowles Foundation Discussion Papers
749, Cowles Foundation for Research in Economics, Yale University.
- Wagenhofer, Alfred, 1990. "Voluntary disclosure with a strategic opponent," Journal of Accounting and Economics, Elsevier, vol. 12(4), pages 341-363, March.
- Grossman, Sanford J, 1981. "The Informational Role of Warranties and Private Disclosure about Product Quality," Journal of Law and Economics, University of Chicago Press, vol. 24(3), pages 461-83, December.
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