Voting over disclosure standards

36 Pages Posted: 18 Jul 2016 Last revised: 31 May 2017

See all articles by Jeremy Bertomeu

Jeremy Bertomeu

Washington University in St. Louis - John M. Olin Business School

Robert P. Magee

Northwestern University

Georg Thomas Schneider

University of Graz

Date Written: July 17, 2016


This article examines the nature of disclosure standards, under the assumption that (i) standards preferred by more firms are collectively chosen and (ii) privately informed firms prefer standards that increase market perceptions about the value of their assets. A standard is stable if it is preferred by a large enough supermajority of firms over any other standards. Absent any restriction on possible standards, only unanimity would make a standard stable. By contrast, choosing standards that classify news from best to worst, there is at most a single stable standard, and it must be full disclosure. For a large class of distributions over valuations, the required supermajority is about two thirds, close to the majority required in many standard-setting boards. Distributions with heavy tails, such as news that contains extreme risks, require higher super majorities to be stable. These insights are robust to certain settings in which the information is used in decision-making.

Keywords: political, certification, financial accounting, mandatory, policy

JEL Classification: D7, M4

Suggested Citation

Bertomeu, Jeremy and Magee, Robert P. and Schneider, Georg Thomas, Voting over disclosure standards (July 17, 2016). Available at SSRN: or

Jeremy Bertomeu (Contact Author)

Washington University in St. Louis - John M. Olin Business School ( email )

One Brookings Drive
Campus Box 1133
St. Louis, MO 63130-4899
United States

Robert P. Magee

Northwestern University ( email )

2001 Sheridan Road
Evanston, IL 60208
United States
847-491-2676 (Phone)
847-467-1202 (Fax)

Georg Thomas Schneider

University of Graz ( email )

Universitätsstrasse 15/G1
Graz, 8010

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