The social value of information in economies with mandatory savings

Pablo Beker and Conrado Cuevas
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Conrado Cuevas: Department of Economics, University of Warwick

The Warwick Economics Research Paper Series (TWERPS) from University of Warwick, Department of Economics

Abstract: We study the value of public information in a stochastic exchange economy where agents trade assets to reallocate risk and mandatory (retirement) savings imposes a lower bound on the market value of some agents' holdings of a nancial asset. Since equilibrium prices depend on the agents' beliefs about the states of nature, the arrival of information shifts the agents' mandatory savings constraints. We show that the arrival of public information can generate an ex-ante Pareto improvement relative to an uninformative equilibrium even when ex-post improvements are not possible.

Date: 2018
New Economics Papers: this item is included in nep-mic
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https://warwick.ac.uk/fac/soc/economics/research/w ... twerp_1152_beker.pdf

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Working Paper: The social value of information in economies with mandatory savings (2018)
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Persistent link: https://EconPapers.repec.org/RePEc:wrk:warwec:1152

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