Endogenous information acquisition and the partial announcement policy

Hiroki Arato, Takeo Hori and Tomoya Nakamura

Information Economics and Policy, 2021, vol. 55, issue C

Abstract: We consider the implementability and welfare effects of a partial announcement policy using a beauty contest model in which agents’ actions are strategic complements and their decisions on public information acquisition are endogenous. We obtain the following results: (i) if a social planner sells public information at a constant price, then multiple equilibria emerge and the partial announcement equilibrium becomes unstable; (ii) there exist pricing rules that ensure a unique and stable equilibrium partial publicity level, which indicates that a partial announcement policy can be implemented; and (iii) as the precision of public information increases, the optimal price rises due to higher optimal publicity level. To realize the higher optimal publicity level in equilibrium, the social planner must reset the pricing rules to lower the price of public information for each publicity level.

Keywords: Beauty contest games; Endogenous information acquisition; Transparency of information; Partial announcement policy (search for similar items in EconPapers)
JEL-codes: C73 D82 D83 E5 (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:iepoli:v:55:y:2021:i:c:s0167624520301426

DOI: 10.1016/j.infoecopol.2020.100898

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