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Optimal Degree of Public Information Dissemination

Author

Listed:
  • Camille Cornand

    () (BETA - Bureau d'Économie Théorique et Appliquée - INRA - Institut National de la Recherche Agronomique - CNRS - Centre National de la Recherche Scientifique - UL - Université de Lorraine - UNISTRA - Université de Strasbourg)

  • Frank Heinemann

    (TU - Technische Universität Berlin)

Abstract

Financial markets and macroeconomic environments are often characterised by positive externalities. In these environments, transparency may reduce expected welfare: public announcements serve as focal points for higher-order beliefs and affect agents' behaviour more than justified by their informational contents. Some scholars conclude that reducing public signals' precision or entirely withholding information may improve welfare. This article shows that public information should always be provided with maximum precision but, under certain conditions, not to all agents. Restricting the degree of publicity is a better-suited instrument for preventing the negative welfare effects of public announcements than restrictions on their precision are. Copyright © 2008 The Author(s).
(This abstract was borrowed from another version of this item.)
(This abstract was borrowed from another version of this item.)

Suggested Citation

  • Camille Cornand & Frank Heinemann, 2008. "Optimal Degree of Public Information Dissemination," Post-Print halshs-00300211, HAL.
  • Handle: RePEc:hal:journl:halshs-00300211
    Note: View the original document on HAL open archive server: https://halshs.archives-ouvertes.fr/halshs-00300211
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    Transparency; Beauty contest; Information;
    All these keywords.

    JEL classification:

    • C73 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Stochastic and Dynamic Games; Evolutionary Games
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • F31 - International Economics - - International Finance - - - Foreign Exchange

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