Disclosure, competition, and learning from asset prices

• 成果类型: Article
• 署名作者: Xiong, Yan; Yang, Liyan
• 署名单位: Hong Kong University of Science & Technology; University of Toronto; Peking University
• 刊物名称: JOURNAL OF ECONOMIC THEORY
• ISSN/ISSBN: 0022-0531
• DOI: 10.1016/j.jet.2021.105331
• 发表日期: 2021
• 关键词: disclosure; Product market competition; Feedback effect; COMPLEMENTARITY; Total surplus; Price informativeness

摘要

We study voluntary information disclosure by oligopoly firms in a setting in which firms learn information from asset prices to guide their production decisions. A firm that discloses information risks losing a competitive advantage over its rivals but may benefit from learning valuable information from a more informative asset market. Considering the financial market helps the product market escape a nondisclosure equilibrium with low total surplus. Firms' disclosure decisions can exhibit strategic complementarity, leading to multiple equilibria. Firms' endogenous disclosure behavior also gives rise to two novel comparative statics: fiercer competition in the product market can reduce consumer and total surplus, and increased noise trading in the financial market can improve price informativeness. (c) 2021 Elsevier Inc. All rights reserved.