Journal of Accounting and Economics Vol. 17 No. 1-2 1994
Public disclosure, private information collection, and short-term trading
Abstract
This paper examines how public disclosure affects private inforamtion acquisition activity in a market economy. We analyze a setting where traders with short-term investment horizons are allowed to trade on their private information prior to a public disclosure. We demonstrate in this setting that public disclosure stimulates investment in private information acquisition. This result is shown to have implications for the magnitude of the pre-announcement and announcement price reactions to the disclosure.
- DOI
- 10.1016/0165-4101(94)90005-1
- Volume
- 17
- Issue
- 1-2
- Pages
- 69-94
- Language
- en
- Sources
- bibtex:phds-export.bib openalex crossref