Information: Hard and Soft

56 Pages Posted: 24 Sep 2018

Multiple version iconThere are 2 versions of this paper

Date Written: September 2018

Abstract

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.

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Suggested Citation

Liberti, Jose Maria and Petersen, Mitchell A., Information: Hard and Soft (September 2018). NBER Working Paper No. w25075. Available at SSRN: https://ssrn.com/abstract=3254069

Jose Maria Liberti (Contact Author)

Northwestern University - Kellogg School of Management ( email )

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HOME PAGE: http://www.kellogg.northwestern.edu/faculty/directory/liberti_jose.aspx

DePaul University ( email )

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Mitchell A. Petersen

Northwestern University - Kellogg School of Management ( email )

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National Bureau of Economic Research (NBER) ( email )

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