Get access

Optimality of the Disclosure of Private Information in a Production-Exchange Economy



    Search for more papers by this author
    • 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


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.

Get access to the full text of this article