Information: Hard and Soft
Jose Liberti () and
Mitchell Petersen ()
No 25075, NBER Working Papers from National Bureau of Economic Research, Inc
Information is a fundamental component of all financial transactions and markets, but it can arrive in multiple forms. We define what is meant by hard and soft information and describe the relative advantages of each. Hard information is quantitative, easy to store and transmit in impersonal ways, and its information content is independent of its collection. As technology changes the way we collect, process, and communicate information, it changes the structure of markets, design of financial intermediaries, and the incentives to use or misuse information. We survey the literature to understand how these concepts influence the continued evolution of financial markets and institutions.
JEL-codes: G2 G21 G3 (search for similar items in EconPapers)
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Published as José María Liberti & Mitchell A Petersen, 2019. "Information: Hard and Soft," The Review of Corporate Finance Studies, vol 8(1), pages 1-41.
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