An Entropy-Based Information Sharing Rule for Asymmetric Information Economies

Meo Claudia ()
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Meo Claudia: Dipartimento di Scienze Economiche e Statistiche, Universit` di Napoli Federico II, Naples, Italy

The B.E. Journal of Theoretical Economics, 2021, vol. 21, issue 1, 315-346

Abstract: The possibility to compare information partitions is investigated for economies with asymmetric information. First, we focus on two potentially suitable instruments, the Boylan distance and the entropy, and show that the former does not fit the purpose. Then, we use the entropy associated with the information partition of each trader to construct a partially endogenous rule which regulates the information sharing process among traders. Finally, we apply this rule to some examples and analyze its impact on two cooperative solutions: the core and the coalition structure value.

Keywords: partitions; information sharing; Boylan distance; entropy; asymmetric information; cooperative solutions for exchange economies (search for similar items in EconPapers)
JEL-codes: C49 C71 D51 D82 (search for similar items in EconPapers)
Date: 2021
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DOI: 10.1515/bejte-2020-0018

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