Incentives for Information Production in Markets where Prices Affect Real Investment

Itay Goldstein, Alexander Guembel () and James Dow
Additional contact information
Itay Goldstein: University of Pennsylvania

No 270, 2008 Meeting Papers from Society for Economic Dynamics

Abstract: We show that the amount of information in equilibrium increases in the expected profitability of the firm’s investments, and that this creates an amplification mechanism from changes in fundamentals to real value. Uncertainty about future performance has a non-trivial effect on information production. We show that information production on investment opportunities is less privately profitable than that on assets in place, and argue that some overinvestment increases firm value.

Date: 2008
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
https://red-files-public.s3.amazonaws.com/meetpapers/2008/paper_270.pdf (application/pdf)

Related works:
Journal Article: Incentives for Information Production in Markets where Prices Affect Real Investment (2017)
Working Paper: Incentives for Information Production in Markets where Prices Affect Real Investment (2017)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:red:sed008:270

Access Statistics for this paper

More papers in 2008 Meeting Papers from Society for Economic Dynamics Society for Economic Dynamics Marina Azzimonti Department of Economics Stonybrook University 10 Nicolls Road Stonybrook NY 11790 USA. Contact information at EDIRC.
Bibliographic data for series maintained by Christian Zimmermann ().