Competition, Comparative Performance, and Market Transparency

Bruce I. Carlin, Shaun William Davies and Andrew Iannaccone

American Economic Journal: Microeconomics, 2012, vol. 4, issue 4, 202-37

Abstract: We study how competition affects market transparency, taking into account that comparative performance is assessed via tournaments and contests. Extending Dye (1985) to a multi-firm setting in which top performers are rewarded, we show that increased competition usually makes disclosure less likely, which lowers market transparency and may decrease per capita welfare. This result appears to be robust to several model variations and as such, has implications for market regulation. (JEL D82, D83, L77, L25)

JEL-codes: D82 D83 L11 L25 (search for similar items in EconPapers)
Date: 2012
Note: DOI: 10.1257/mic.4.4.202
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Citations: View citations in EconPapers (6)

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