Disclosure Policy in a Mixed Market

• Matsui, Kenji

Abstract

This paper investigates the optimal disclosure strategy for private information in a mixed duopoly market, where a state-owned enterprise (SOE) and a joint-stock company compete to supply products. I construct a model where the two firms compete in either quantity or price, and uncertainty is associated with either marginal cost or market demand. The model identifies the optimal disclosure strategies that constitute a perfect Bayesian equilibrium by type of competition and uncertainty. In Cournot competition, both firms disclose information under cost uncertainty, while only the SOE or neither firm discloses information under demand uncertainty. Alternatively, in Bertrand competition, only the joint-stock company discloses information under cost uncertainty or demand uncertainty. Recently, developed countries have required the same level of disclosure standards for SOEs as for ordinary joint-stock companies. The findings described in this paper warn that such mandatory disclosure by SOEs can trigger a reaction by joint-stock companies, putting the economy at risk of a reduction in welfare.

Journal

• European Accounting Review

  European Accounting Review 25 (1), 81-107, 2016-01-02

  Taylor & Francis

Keywords

• Disclosure
• Cost information
• Market information
• Mixed duopoly

Details

• CRID: 1050012570393543040
• NII Article ID: 120006491581
• DOI: 10.1080/09638180.2014.977801
• ISSN: 14684497
• ISSN: 09638180
• HANDLE: 20.500.14094/90005055
• Web Site: http://www.tandfonline.com/doi/pdf/10.1080/09638180.2014.977801
• Text Lang: en
• Article Type: journal article
• Data Source:
  • IRDB
  • Crossref
  • CiNii Articles
  • KAKEN