Value of Information in Competitive Economies with Incomplete Markets
AbstractA substantial literature addresses the negative effect 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 sufficiently incomplete. More specifically, for any competitive equilibrium of a generic economy, we can find a finer information structure such that an allocation that is resource feasible and measurable with respect to thisinformation ex-post Pareto dominates the given equilibrium allocation.Journal of Economic Literature Classification Numbers: D52, D60, D80.Keywords: Competitive Equilibrium, Incomplete Markets, Value of Information.
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Bibliographic InfoPaper provided by Financial Markets Group in its series FMG Discussion Papers with number dp596.
Date of creation: Sep 2007
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Other versions of this item:
- Piero Gottardi & Rohit Rahi, 2010. "Value of Information in Competitive Economies with Incomplete Markets," FMG Discussion Papers dp658, Financial Markets Group.
- Piero Gottardi & Rohit Rahi, 2010. "Value of Information in Competitive Economies with Incomplete Markets," Economics Working Papers ECO2010/34, European University Institute.
- Piero Gottardi & Rohit Rahi, 2007. "Value of Information in Competitive Economies with Incomplete Markets," Working Papers 2007_25, Department of Economics, University of Venice "Ca' Foscari".
- D52 - Microeconomics - - General Equilibrium and Disequilibrium - - - Incomplete Markets
- D60 - Microeconomics - - Welfare Economics - - - General
- D80 - Microeconomics - - Information, Knowledge, and Uncertainty - - - General
This paper has been announced in the following NEP Reports:
- NEP-ALL-2007-11-17 (All new papers)
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