The value of information with heterogeneous agents and partially revealing prices
By: Juan Carlos Hatchondo.
Contributors: Federal Reserve Bank of Richmond.
Series: Working paper ;; no. 05-6; Working paper (Federal Reserve Bank of Richmond : Online) ;; no. 05-6.
Publisher: Federal Reserve Bank of Richmond
Published: 2005
Place of publication: [Richmond, Va.]
Language: eng
Format: Electronic resource
Description: "This paper studies how the arrival of information affects welfare in a general equilibrium exchange economy with incomplete and differential information. It considers a setup in which agents differ in their attitudes toward risk. This introduces gains from trade. In equilibrium, the information sets differ across agents, i.e., they hold heterogeneous beliefs. For certain structures of primitives, the latter introduces an adverse effect on welfare. In this case, the arrival of information has opposite effects: on the one hand it weakens the adverse effect on trade, and on the other hand it strengthens the Hirshleifer effect. The first effect fosters and the second one discourages risk-sharing trades. When the first effect dominates, welfare increases upon the arrival of more precise information."--Federal Reserve Bank of Richmond web site.
Notes: Includes bibliographical references.
Title from PDF file as viewed on Oct. 27, 2005.
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Mode of access: World Wide Web.