Information: Hard and Soft

55 Pages Posted: 11 Oct 2018

Multiple version iconThere are 2 versions of this paper

Date Written: August 31, 2018


Information is a fundamental component of all financial transactions and markets, but it can arrive in multiple forms. We define what is meant by hard and soft information and describe the relative advantages of each. Hard information is quantitative, easy to store and transmit in impersonal ways, and its information content is independent of its collection. As technology changes the way we collect, process, and communicate information, it changes the structure of markets, design of financial intermediaries, and the incentives to use or misuse information. We survey the literature to understand how these concepts influence the continued evolution of financial markets and institutions.

Keywords: soft information, hard information, hardening soft information, boundaries of firm, organizational design, lending, distance, transmission of information, FinTech

JEL Classification: G20, G21, G30

Suggested Citation

Liberti, Jose Maria and Petersen, Mitchell A., Information: Hard and Soft (August 31, 2018). Available at SSRN: or

Jose Maria Liberti

Northwestern University - Kellogg School of Management ( email )

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DePaul University ( email )

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Mitchell A. Petersen (Contact Author)

Northwestern University - Kellogg School of Management ( email )

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National Bureau of Economic Research (NBER) ( email )

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