Dynamic Information Disclosure

51 Pages Posted: 22 Jan 2013 Last revised: 31 Jan 2016

See all articles by Martin Dierker

Martin Dierker

Korea Advanced Institute of Science and Technology (KAIST)

Avanidhar Subrahmanyam

University of California, Los Angeles (UCLA) - Finance Area; Institute of Global Finance, UNSW Business School; Financial Research Network (FIRN)

Date Written: January 21, 2013

Abstract

We explore the optimal timing of voluntary disclosures by firms. By delaying disclosure of a signal, firms encourage the acquisition of correlated signals by reducing informed investors’ exposure to the long-term risk of holding the asset. Immediate disclosure reduces rents from acquiring the correlated signal, and thus is sometimes suboptimal in a dynamic setting. We characterize conditions under which postponing disclosure is preferable, which allows us to develop predictions on the timing of voluntary information disclosures such as management guidance.

Keywords: disclosure, informational efficiency, noisy rational expectations

JEL Classification: G12, G14

Suggested Citation

Dierker, Martin and Subrahmanyam, Avanidhar, Dynamic Information Disclosure (January 21, 2013). Contemporary Accounting Research, Forthcoming. Available at SSRN: https://ssrn.com/abstract=2204819 or http://dx.doi.org/10.2139/ssrn.2204819

Martin Dierker

Korea Advanced Institute of Science and Technology (KAIST) ( email )

85 Hoegi-ro
Seoul, 130-722
Korea

Avanidhar Subrahmanyam (Contact Author)

University of California, Los Angeles (UCLA) - Finance Area ( email )

Los Angeles, CA 90095-1481
United States
310-825-5355 (Phone)
310-206-5455 (Fax)

Institute of Global Finance, UNSW Business School

Sydney, NSW 2052
Australia

Financial Research Network (FIRN)

C/- University of Queensland Business School
St Lucia, 4071 Brisbane
Queensland
Australia

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