Competitive Disadvantage and Discretionary Disclosure in Industries

Greg Clinch and Robert E. Verrecchia
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Greg Clinch: Australian Graduate School of Management, The University of New South Wales, Sydney NSW 2052; E†mail: gregc@agsm.unsw.edu.au
Robert E. Verrecchia: Wharton School, University of Pennsylvania, Philadelphia PA 19104, USA.

Australian Journal of Management, 1997, vol. 22, issue 2, 125-137

Abstract: We explore how competitive disadvantage affects firms' incentives to disclose or withhold infor Mation of common interest to competing firms within a Cournot duopoly. We establish the existence of a unique disclosure equilibrium to the problem of firms disclosing private infor Mation about aggregate demand, and show that firms choose to withhold infor Mation of either very high or very low demand. We also show that both the size of the disclosure interval and ex ante probability of disclosure decreases as the intensity of competition between firms increases.

Keywords: COMPETITIVE DISADVANTAGE; DISCRETIONARY DISCLOSURE; DISCLOSURE REGULATION (search for similar items in EconPapers)
Date: 1997
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Citations: View citations in EconPapers (25)

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Persistent link: https://EconPapers.repec.org/RePEc:sae:ausman:v:22:y:1997:i:2:p:125-137

DOI: 10.1177/031289629702200201

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