VALUE OF INFORMATION IN COMPETITIVE ECONOMIES WITH INCOMPLETE MARKETS

Piero Gottardi and Rohit Rahi ()

International Economic Review, 2014, vol. 55, issue 1, 57-81

Abstract: We study the value of public information in competitive economies with incomplete markets. We show that generically the welfare effect of a change in the information available prior to trading can be in any direction: There exist changes in information that make all agents better off and changes for which all agents are worse off. In contrast, for any change in information, a Pareto improvement is feasible, that is, attainable by a planner facing the same informational and asset market constraints as agents. In this sense, the response of competitive markets to changes in information is typically not socially optimal.

Date: 2014
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Citations: View citations in EconPapers (3)

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https://doi.org/10.1111/iere.12041

Related works:
Working Paper: Value of information in competitive economies with incomplete markets (2010)
Working Paper: Value of Information in Competitive Economies with Incomplete Markets (2010)
Working Paper: Value of Information in Competitive Economies with Incomplete Markets (2010)
Working Paper: Value of information in competitive economies with incomplete markets (2007)
Working Paper: Value of Information in Competitive Economies with Incomplete Markets (2007)
Working Paper: Value of Information in Competitive Economies with Incomplete Markets (2007)
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