Optimality of the Disclosure of Private Information in a Production‐Exchange Economy

  • Author(s): BRETT TRUEMAN
  • Published: Apr 30, 2012
  • Pages: 913-924
  • DOI: 10.1111/j.1540-6261.1983.tb02510.x

ABSTRACT

This study provides an analysis of the effects on individual welfare of information revelation in a production‐exchange economy. It is shown that the total effect of information revelation on an agent's utility level may be decomposed into three elements: a price effect, a shareholding effect, and a production effect. Through this decomposition, it is demonstrated that, although a Pareto improvement need not result from information revelation, there are perspectives from which the release can be considered beneficial.

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