 Optimal Degree of Public Information DisseminationCamille Cornand and Frank Heinemann Post-Print from HAL Abstract: In currency exchange markets, there is a conflict between individual decisions and the socially optimal solution. Whereas agents have a coordination motive to take the same position, at the social level effective market coordination per se is not socially valuable, and the central bank aims at driving agents' actions as close as possible to the economic fundamental state. Some studies argue that it might be better to withhold public information because its potential to serve as a focal point induces agents to exaggerate the importance of public announcements. This paper shows that public information should always be provided with maximum precision, but under certain condition not to all agents. Restrictions on the degree of publicity are a better instrument with which to prevent the negative welfare effects of public announcements than restrictions on their precision are. The optimal degree of publicity is always positive. Keywords: Transparency; Public information; Private information; Common p-beliefs; Coordination; Strategic complementarity (search for similar items in EconPapers) Published in The Economic Journal, 2008, 118 (528), pp.718-742. ⟨10.1111/j.1468-0297.2008.02139.x⟩ There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it. Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-00279244 DOI: 10.1111/j.1468-0297.2008.02139.x Access Statistics for this paper More papers in Post-Print from HAL |
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