Unraveling of Information: Competition and Uncertainty

Stivers Andrew E
Additional contact information
Stivers Andrew E: Oregon State University, andrew.stivers@gmail.com

The B.E. Journal of Theoretical Economics, 2004, vol. 4, issue 1, 18

Abstract: This paper examines incentives for information disclosure in a oligopolistic market when buyers are unsure of the existence of that information. Previous empirical and theoretical work has shown that mandatory disclosure laws can be binding when buyers do not know whether the information exists. This paper shows that the information unraveling result is strengthened by competition not only because a market with more firms is increasingly likely to have at least one firm with quality high enough to want to disclose it (thus starting the information unraveling result) but also because firms reveal information that makes themselves look bad if they can make their competitors look worse. This results in prisoner's dilemma style incentives to reveal that ensures full disclosure as the number of firms goes to infinity.

Keywords: asymmetric information; quality uncertainty; information disclosure; information revelation (search for similar items in EconPapers)
Date: 2004
References: View complete reference list from CitEc
Citations: View citations in EconPapers (19)

Downloads: (external link)
https://doi.org/10.2202/1534-598X.1151 (text/html)
For access to full text, subscription to the journal or payment for the individual article is required.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:bpj:bejtec:v:topics.4:y:2004:i:1:n:9

Ordering information: This journal article can be ordered from
https://www.degruyter.com/journal/key/bejte/html

DOI: 10.2202/1534-598X.1151

Access Statistics for this article

The B.E. Journal of Theoretical Economics is currently edited by Burkhard C. Schipper

More articles in The B.E. Journal of Theoretical Economics from De Gruyter
Bibliographic data for series maintained by Peter Golla ().