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Information acquisition and the value of bad news

Alessandro Ispano

Games and Economic Behavior, 2018, vol. 110, issue C, 165-173

Abstract: An interested party who controls both the acquisition and the transmission of information may find it optimal to disclose her evidence even when it is unfavorable. At the same time, the public does not necessarily make better decisions when there is more disclosure. The model provides a rationale for voluntary adverse announcements such as product recalls and earning warnings and implications for disclosure laws.

Keywords: Persuasion; Adverse disclosure; Testing; Disclosure laws (search for similar items in EconPapers)
JEL-codes: C72 D82 D83 (search for similar items in EconPapers)
Date: 2018
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Working Paper: Information acquisition and the value of bad news (2013) Downloads
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