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The social value of information in economies with mandatory savings

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  • Beker, Pablo F.

    (Department of Economics, University of Warwick)

  • Cuevas, Conrado

    (Department of Economics, University of Warwick)

Abstract

We study the value of public information in a stochastic exchange economy where agents trade assets to reallocate risk and mandatory (retirement) savings imposes a lower bound on the market value of some agents' holdings of a nancial asset. Since equilibrium prices depend on the agents' beliefs about the states of nature, the arrival of information shifts the agents' mandatory savings constraints. We show that the arrival of public information can generate an ex-ante Pareto improvement relative to an uninformative equilibrium even when ex-post improvements are not possible.

Suggested Citation

  • Beker, Pablo F. & Cuevas, Conrado, 2018. "The social value of information in economies with mandatory savings," CRETA Online Discussion Paper Series 40, Centre for Research in Economic Theory and its Applications CRETA.
    • Handle: RePEc:wrk:wcreta:40
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    References listed on IDEAS

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