Persuading large investors

• 成果类型: Article
• 署名作者: Alonso, Ricardo; Zachariadis, Konstantinos E.
• 署名单位: University of London; London School Economics & Political Science; Centre for Economic Policy Research - UK; University of London; Queen Mary University London
• 刊物名称: JOURNAL OF ECONOMIC THEORY
• ISSN/ISSBN: 0022-0531
• DOI: 10.1016/j.jet.2024.105933
• 发表日期: 2024
• 关键词: Information design; Bayesian persuasion; Stress tests; Financial disclosure; Endogenous public signal

摘要

A regulator who designs a public stress test to avert default of a distressed bank via private investment must account for large investors' private information on the bank's state. We provide conditions for crowding-in (crowding-out) so that the regulator offers an endogenous more (less) informative signal to better-informed investors. We show that crowding-in occurs as long as investors remain responsive to public news and they are sufficiently well informed: the regulator's test perfectly reveals the state as investors' become privately perfectly informed. Investors' value from more precise private signals may come from their effect on the public test's precision.