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The Impact of Mandatory Disclosure on Information Acquisition: Theory and Experiment

Author

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  • Kazunori Miwa

    (Graduate School of Economics, Osaka University)

Abstract

This study experimentally investigates the interaction between firm fs information acquisition choice and mandatory disclosure in the presence of proprietary costs. The results demonstrate that mandatory disclosure diminishes firm fs incentive to acquire industry-wide demand information when information acquisition is costly and endogenous. Further, I also show that firm fs production decision is improved by acquiring information. Taken together, although acquiring information improves firm fs production decision, mandatory disclosure diminishes firm fs incentive to do so, and thus, deteriorates firm fs information environment. This leads to inefficient production, which in turn, might have a substantial impact on market outcomes.

Suggested Citation

  • Kazunori Miwa, 2013. "The Impact of Mandatory Disclosure on Information Acquisition: Theory and Experiment," Discussion Papers in Economics and Business 13-01, Osaka University, Graduate School of Economics.
    • Handle: RePEc:osk:wpaper:1301
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    References listed on IDEAS

    as
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    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Information Acquisition; Mandatory Disclosure; Duopoly; Proprietary Cost; Experiment;
    All these keywords.

    JEL classification:

    • M41 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Accounting
    • M48 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Government Policy and Regulation

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