Not Only What but Also When: A Theory of Dynamic Voluntary Disclosure

American Economic Review, 2014, vol. 104, issue 8, pages 2400-2420

21 Pages Posted: 14 Jun 2012 Last revised: 22 Aug 2014

See all articles by Ilan Guttman

Ilan Guttman

Leonard N. Stern School of Business, New York University; New York University - Stern Scholl of business

Ilan Kremer

University of Warwick

Andrzej Skrzypacz

Stanford University - Stanford Graduate School of Business

Date Written: April 1, 2012

Abstract

We examine a dynamic model of voluntary disclosure of multiple pieces of private information. In our model, a manager of a firm who may learn multiple signals over time interacts with a competitive capital market and maximizes payoffs that increase in both period prices. We show (perhaps surprisingly) that in equilibrium later disclosures are interpreted more favorably even though the time the manager obtains the signals is independent of the value of the firm. We also provide sufficient conditions for the equilibrium to be in threshold strategies.

Keywords: corporate disclosure, valuation, asset pricing, markets

JEL Classification: D21, D82, G32, L25

Suggested Citation

Guttman, Ilan and Kremer, Ilan and Skrzypacz, Andrzej, Not Only What but Also When: A Theory of Dynamic Voluntary Disclosure (April 1, 2012). American Economic Review, 2014, vol. 104, issue 8, pages 2400-2420 , Available at SSRN: https://ssrn.com/abstract=2083850 or http://dx.doi.org/10.2139/ssrn.2083850

Ilan Guttman (Contact Author)

Leonard N. Stern School of Business, New York University ( email )

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New York University - Stern Scholl of business ( email )

Ilan Kremer

University of Warwick ( email )

Gibbet Hill Rd.
Coventry, West Midlands CV4 8UW
United Kingdom

Andrzej Skrzypacz

Stanford University - Stanford Graduate School of Business ( email )

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Stanford, CA 94305-5015
United States
650-736-0987 (Phone)
650-725-9932 (Fax)

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