Financial Disclosure and Market Transparency with Costly Information Processing

摘要: We study a model where some investors ("hedgers") are bad at information processing, while others ("speculators") have superior information-processing ability and trade purely to exploit it. The disclosure of financial induces externality: if speculators refrain from trading, hedgers do the same, depressing asset price. Market transparency reinforces this mechanism, by making speculators' trades more visible hedgers. As consequence, issuers will oppose both fundamentals trading transparency. Issuers may either under- or over-provide compared socially efficient level bargaining power than hedgers, they never under-provide it otherwise. When low literacy, forbidding their access market be efficient.