Incentives to Acquire Information under Mandatory versus Voluntary Disclosure

Abstract

Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Abstract This paper compares the incentives of a party to acquire information prior to negotiating contractual terms with a second party. Two legal regimes are compared: disclosing information before negotiations start is mandatory or it remains voluntary. By assumption, information can only truthfully be disclosed but, under voluntary disclosure, the fact that no evidence was found cannot credibly be communicated. Terms of use: Documents in EconStor mayIf the party that may acquire information enjoys encompassing bargaining power, the incentives to acquire information will be excessive relative to …rst best quite generally. Otherwise, more surprisingly, acquisition incentives turn out insu¢ cient even under voluntary disclosure for an informational setting referred to as sel…sh acquisition.For another setting, referred to as cooperative acquisition, the incentives under voluntary disclosure are even lower as compared with mandatory disclosure. All results hold independently of the underlying bargaining structure as exclusive use of constraints is made that hold for equilibrium payo¤s from any bargaining game.JEL classi…cation: K12, K13

Subpoena power and informational lobbying

“…Instead, Lewis and Poitevin obtained their result by assuming that the receiver is imperfectly able to understand the disclosed evidence, a feature not present in our analysis. Matthews and Postlewaite (1985), Dahm et al (2009), Polinsky and Shavell (2012), and Schweizer (2017) studied the effect of mandatory disclosure on a firm’s incentive to test for product quality. These papers show that, by preventing the firm from keeping silent when it receives unfavorable information, mandatory disclosure laws weaken the firm’s incentives to test for product quality, which could reduce consumers’ welfare compared with a situation where disclosure is voluntary.…”

Contracting under Adverse Selection: Certifiable vs. Uncertifiable Information

“…Hoppe and Schmitz, 2013a; Buso, 2019), I am not aware of any papers that explore certi…able information in this context.19 In this context it might also be worthwhile to study screening problems with hybrid information structures where veri…cation is costly, as in the literature on debt contracts initiated byTownsend (1979). On disclosure laws, see also the recent work bySchweizer (2017) and the literature discussed there.…”