When and How to Disclose a Random Walk
Speaker
Amnon Schrieber
Date
04/06/2019 - 13:00 - 11:30Add To Calendar
2019-06-04 11:30:00
2019-06-04 13:00:00
When and How to Disclose a Random Walk
We examine a dynamic model in which a manager runs a firm
whose value follows a random walk. The manager utility is based on
market prices that equal the value conditional on available informa-
tion. The manager may observe the value with some probability and
in such a case can disclose verifiable evidence regarding this value. We
characterize the manager strategy and show that he follows a thresh-
old strategy but may reveal information that will not be revealed in a
static model. A value that is disclosed leads to a lower price as more
time passes without further disclosure.
Joint work with Ilan Kremer and Andy Skrzypacz.
Economics building (504), faculty lounge on the first floor
אוניברסיטת בר-אילן - Department of Economics
Economics.Dept@mail.biu.ac.il
Asia/Jerusalem
public
Place
Economics building (504), faculty lounge on the first floor
Affiliation
Bar Ilan University
Abstract
We examine a dynamic model in which a manager runs a firm
whose value follows a random walk. The manager utility is based on
market prices that equal the value conditional on available informa-
tion. The manager may observe the value with some probability and
in such a case can disclose verifiable evidence regarding this value. We
characterize the manager strategy and show that he follows a thresh-
old strategy but may reveal information that will not be revealed in a
static model. A value that is disclosed leads to a lower price as more
time passes without further disclosure.
Joint work with Ilan Kremer and Andy Skrzypacz.
Last Updated Date : 04/12/2022
