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Information Inequality and the Role of Public Information

Author

Listed:
  • Jin Yeub Kim

    (Yonsei University)

  • Myungkyu Shim

    (Yonsei University)

Abstract

Transparent disclosures of public information might be one natural policy to reduce information inequality among individuals. We conduct a welfare analysis of such policy by introducing ex-ante heterogeneity in individuals’ private information in a class of economies with dispersed information and strategic complementarity or substitutability. We find that better private information for already privately better-informed individuals increases welfare, even though it may be accompanied by greater information inequality. We also show that the better the private information for the already better-informed individuals, the more likely that increasing precision of public information reduces welfare. Our findings suggest caution in making information policies that aim to narrow informational gap with better public information.

Suggested Citation

  • Jin Yeub Kim & Myungkyu Shim, 2022. "Information Inequality and the Role of Public Information," Korean Economic Review, Korean Economic Association, vol. 38, pages 207-230.
    • Handle: RePEc:kea:keappr:ker-20220101-38-1-07
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    Information Inequality; Public Information; Disclosure; Welfare; Coordination;
    All these keywords.

    JEL classification:

    • D62 - Microeconomics - - Welfare Economics - - - Externalities
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies
    • E61 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Policy Objectives; Policy Designs and Consistency; Policy Coordination

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