Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/246486 
Authors: 
Year of Publication: 
2020
Series/Report no.: 
Working Paper No. 2020-05
Publisher: 
Rutgers University, Department of Economics, New Brunswick, NJ
Abstract: 
I study the effect of public information disclosure in a market setting where private information acquisition exhibits strategic complementarity. To overcome the issue of equilibrium multiplicity, I introduce heterogeneous information cost and imperfect information on the cost distribution. The resulting unique equilibrium features nonlinear responses to information disclosure. In particular, the classic \crowding-out" result can be reversed and public disclosure \crowd in" more private information acquisition. This effect is most prominent when there is high uncertainty about economic fundamental. The theory predicts that public disclosure of intermediate precision (neither too precise nor too vague) is most effective in stimulating private information acquisition.
Subjects: 
Information Disclosure
Information Acquisition
Dynamic complementarity
Global Games
JEL: 
G1
G12
G14
Document Type: 
Working Paper

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