Value of information in competitive economies with incomplete markets.

• Autores: Piero Gottardi, Rohit Rahi
• Localización: International economic review, ISSN-e 1468-2354, Vol. 55, Nº. 1, 2014, págs. 57-81
• Idioma: inglés
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• Resumen

  • We study the value of public information in competitive economies with incomplete markets. We show that generically the welfare effect of a change in the information available prior to trading can be in any direction: There exist changes in information that make all agents better off and changes for which all agents are worse off. In contrast, for any change in information, a Pareto improvement is feasible, that is, attainable by a planner facing the same informational and asset market constraints as agents. In this sense, the response of competitive markets to changes in information is typically not socially optimal. [ABSTRACT FROM AUTHOR]