Value of Information in Competitive Economies with Incomplete Markets

Piero Gottardi () and Rohit Rahi ()

No 2007_25, Working Papers from University of Venice "Ca' Foscari", Department of Economics

Abstract: A substantial literature addresses the negative effect on welfare of the release of information in a competitive market economy. We show that the value of information in this setting is typically positive if asset markets are sufficiently incomplete. More specifically, for any competitive equilibrium of a generic economy, we can find a finer information structure such that an allocation that is resource feasible and measurable with respect to this information ex-post Pareto dominates the given equilibrium allocation.

Keywords: Competitive Equilibrium; Incomplete Markets; Value of Information. (search for similar items in EconPapers)
JEL-codes: D52 D60 D80 (search for similar items in EconPapers)
Date: 2007
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Related works:
Working Paper: Value of Information in Competitive Economies with Incomplete Markets (2007)
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