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Endogenous Information Acquisition and the Partial Announcement Policy

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  • Hiroki Arato
  • Takeo Hori
  • Tomoya Nakamura

Abstract

We consider implementability and the welfare effects of a partial announcement policy using a model of a beauty contest where agents' actions are strategic complements and where their decisions on public information acquisition are endogenous. The following results are obtained: i) if the authorities sell public information at a constant price, multiple equilibria emerge and a partial announcement equilibrium is unstable; ii) here exist pricing rules that ensure the uniqueness and stability of mixed strategy equilibria, which indicates that a partial announcement policy can be implemented; iii) the optimal price of public information rises as its precision increases relative to private information; iv) the optimal price is independent of the degree of strategic complementarity.

Suggested Citation

  • Hiroki Arato & Takeo Hori & Tomoya Nakamura, 2014. "Endogenous Information Acquisition and the Partial Announcement Policy," ISER Discussion Paper 0892r, Institute of Social and Economic Research, Osaka University, revised Apr 2014.
    • Handle: RePEc:dpr:wpaper:0892r
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    References listed on IDEAS

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    Cited by:

    1. Trabelsi, Emna & Hichri, Walid, 2021. "Central Bank Transparency with (semi-)public Information: Laboratory Experiments," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 90(C).
    2. repec:dpr:wpaper:0908 is not listed on IDEAS
    3. Hüning, Hendrik & Meub, Lukas, 2016. "Optimal public information dissemination: Introducing multiplier effects into a generalized beauty contest," University of Göttingen Working Papers in Economics 260 [rev.], University of Goettingen, Department of Economics.
    4. Tomoya Nakamura, 2014. "One-Leader and Multiple-Follower Stackelberg Games with Private Information," ISER Discussion Paper 0908r, Institute of Social and Economic Research, Osaka University, revised Aug 2014.
    5. Hüning, Hendrik & Meub, Lukas, 2015. "Optimal public information dissemination: Introducing observational learning into a generalized beauty contest," HWWI Research Papers 169, Hamburg Institute of International Economics (HWWI).
    6. Hüning, Hendrik & Meub, Lukas, 2015. "Optimal public information dissemination: Introducing observational learning into a generalized beauty contest," University of Göttingen Working Papers in Economics 260, University of Goettingen, Department of Economics.
    7. Stephanie L. Chan, 2021. "The Social Value of Public Information When Not Everyone is Privately Informed," Working Papers 2021-09-18, Wang Yanan Institute for Studies in Economics (WISE), Xiamen University.

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    More about this item

    Keywords

    Beauty contest games; Endogenous information acquisition; Transparency of information; Partial announcement policy;
    All these keywords.

    JEL classification:

    • C73 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Stochastic and Dynamic Games; Evolutionary Games
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • E5 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit

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