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Single vs. multiple disclosures in an experimental asset market with information acquisition

Alba Ruiz-Buforn, Simone Alfarano, Eva Camacho-Cuena and Andrea Morone
Authors registered in the RePEc Author Service: Eva Camacho Cuena ()

MPRA Paper from University Library of Munich, Germany

Abstract: We conduct laboratory experiments to study whether increasing the number of independent public signals in an economy with endogenous private information is an effective measure to promote the acquisition of information and to enhance price efficiency. We observe that the release of public information crowds out the traders' demand for private information under a single disclosure while favoring private information acquisition under multiple disclosures. The latter measure improves price accuracy in forecasting the asset fundamental value. However, multiple disclosures do not eliminate the adverse effect of market overreaction to public information, becoming a potential source of fragility for the financial system.

Keywords: Experiments; Financial markets; Public information; Information acquisition; Multiple disclosures (search for similar items in EconPapers)
JEL-codes: C92 D82 G14 (search for similar items in EconPapers)
Date: 2020-05
New Economics Papers: this item is included in nep-exp
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Journal Article: Single vs. multiple disclosures in an experimental asset market with information acquisition (2022) Downloads
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