Social Value of Public Information: Morris and Shin (2002) Is Actually Pro-Transparency, Not Con: Reply
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چکیده
The comment by Lars Svensson (2006) is an important contribution to the debate on the welfare effects of public information. Morris and Shin (2002) had shown that the provision of more precise public information can, in principle, be detrimental to welfare, but Svensson’s note opens the debate on the quantitative significance of the result. Svensson (2006) makes two observations. First, the result that welfare is locally decreasing in the precision of public information holds only with restrictions on information parameters that are empirically implausible. Second, even on a global analysis, when the public signal has precision no lower than the precision of the private signal, welfare is higher with the public signal than without. Both observations are of value, but the second would be more relevant for welfare analyses that inform the binary choice of whether a public disclosure should be made or not. Following the notation in Svensson (2006), the expression for ex ante welfare in the presence of the public signal, when the precision of the public signal is , is given by
منابع مشابه
Social Value of Public Information: Morris and Shin (2002) Is Actually pro Transparency, Not Con *
The main result of Morris and Shin (2002)–restated in papers by Amato, Morris, and Shin (2002) and Amato and Shin (2003) and commented upon by the Economist (2004)–has been presented and interpreted as an anti-transparency result: more public information can be bad. However, some scrutiny of the result shows that it is actually pro transparency: except in very special circumstances, more public...
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تاریخ انتشار 2006