Welfare fragmented information effects: The cost-benefit analysis and Trade-offs

Emna Trabelsi

Journal of Information Economics, 2024, vol. 2, issue 1, 1-32

Abstract: We offer an extensive analysis of the significance of information within the realm of Gaussian quadratic economies. We build upon the seminal papers of Morris and Shin (2002, 2007) and consider a signal game of incomplete information. Particularly, we question the suitability of partial transparency portrayed by fragmented information in addition to the private signal in terms of welfare effects. We can summarize our findings in two main points. First, fragmented information, in conjunction with a private signal, can reduce the reliance on public signals. Second, a conflicting effect arises between increasing full disclosure and increasing the precision of fragmented (semi-public) information when examining different complex scenarios, involving for example endogenous private information or imperfect correlated signals. For a critical threshold, an optimal communication strategy designed by fragmented information should be implemented whenever that kind of information is acquired at a high precision.

Keywords: Transparency; Semi-public information; Private information; Trade-off; Coordination games; Signal game with incomplete information (search for similar items in EconPapers)
Date: 2024
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Citations: View citations in EconPapers (1)

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