Graduate School of Management, University of California, Los Angeles. I would like to thank Professors Enrique Arzac, Krishna Ramaswamy, James Scott, Jr., and Sheridan Titman for their helpful comments. I am solely responsible for all remaining errors.
Optimality of the Disclosure of Private Information in a Production-Exchange Economy
Article first published online: 30 APR 2012
1983 The American Finance Association
The Journal of Finance
Volume 38, Issue 3, pages 913–924, June 1983
How to Cite
TRUEMAN, B. (1983), Optimality of the Disclosure of Private Information in a Production-Exchange Economy. The Journal of Finance, 38: 913–924. doi: 10.1111/j.1540-6261.1983.tb02510.x
- Issue published online: 30 APR 2012
- Article first published online: 30 APR 2012
This study provides an analysis of the effects on individual welfare of information revelation in a production-exchange economy. It is shown that the total effect of information revelation on an agent's utility level may be decomposed into three elements: a price effect, a shareholding effect, and a production effect. Through this decomposition, it is demonstrated that, although a Pareto improvement need not result from information revelation, there are perspectives from which the release can be considered beneficial.