Blackwell's Ordering and Public Information
We characterize a precise comparative static on welfare and the amount of public information in an economy under uncertainty. Results dating to Hirshleifer (1971) have suggested that information can have negative value in such a setting, but counterexamples using competitive equilibrium outcomes have suppressed general results to this effect. We show that under the solution concept of implementable allocations, the negative relationship between more public information in the sense of Blackwell and welfare is fully general. Furthermore, Blackwell's ranking is necessary as well as sufficient to obtain our ranking, and hence ours provides an equivalent characterization of his ordering.
|Date of creation:||25 Apr 2002|
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- Bernhard Eckwert & Itzhak Zilcha, 2003.
"Incomplete risk sharing arrangements and the value of information,"
Springer;Society for the Advancement of Economic Theory (SAET), vol. 21(1), pages 43-58, 01.
- Eckwert, B. & Zilcha, I., 1999. "Incomplete Risk Sharing Arrangements and the Value of Information," Papers 13-99, Tel Aviv.
- Marshall, John M, 1974. "Private Incentives and Public Information," American Economic Review, American Economic Association, vol. 64(3), pages 373-390, June.
- Edward E. Schlee, 2001. "The Value of Information in Efficient Risk-Sharing Arrangements," American Economic Review, American Economic Association, vol. 91(3), pages 509-524, June.
- Nils H. Hakansson & J. Gregory Kunkel & James A. Ohlson., 1981.
"Sufficient and Necessary Conditions for Information to Have Social Value in Pure Exchange,"
Research Program in Finance Working Papers
122, University of California at Berkeley.
- Hakansson, Nils H & Kunkel, J Gregory & Ohlson, James A, 1982. " Sufficient and Necessary Conditions for Information to Have Social Value in Pure Exchange," Journal of Finance, American Finance Association, vol. 37(5), pages 1169-1181, December.
- Hirshleifer, Jack, 1971. "The Private and Social Value of Information and the Reward to Inventive Activity," American Economic Review, American Economic Association, vol. 61(4), pages 561-574, September.
- Green, Jerry R, 1981. "Value of Information with Sequential Futures Markets," Econometrica, Econometric Society, vol. 49(2), pages 335-358, March.
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