Public information quality with monopolistic sellers

Research output: Contribution to journalArticlepeer-review

2 Scopus citations


We show that in markets with asymmetric information, even if there is full agreement on the choice of optimal information quality, entrusting the choice of (unverifiable) public information quality to traders who benefit from such information leads to inefficiencies. However, delegation of information quality choice to an independent agent who is precluded from sharing in trading profits results in efficient implementation. This result provides a game-theoretic rationale for current institutional arrangements where a private organization that is independent of market traders, the Financial Accounting Standards Board, determines the standards for public disclosures. Journal of Economic Literature Classification Numbers: D41, D42, D82.

Original languageEnglish (US)
Pages (from-to)261-279
Number of pages19
JournalGames and Economic Behavior
Issue number2
StatePublished - Oct 1996
Externally publishedYes

All Science Journal Classification (ASJC) codes

  • Finance
  • Economics and Econometrics


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