EFFECTS OF CHANGES IN THE LEVEL OF PUBLIC DISCLOSURE ON THE ACQUISITION OF PRIVATE INFORMATION: AN EXPERIMENTAL MARKETS INVESTIGATION.

Persistent Link:
http://hdl.handle.net/10150/183886
Title:
EFFECTS OF CHANGES IN THE LEVEL OF PUBLIC DISCLOSURE ON THE ACQUISITION OF PRIVATE INFORMATION: AN EXPERIMENTAL MARKETS INVESTIGATION.
Author:
KING, RONALD RAYMOND.
Issue Date:
1986
Publisher:
The University of Arizona.
Rights:
Copyright © is held by the author. Digital access to this material is made possible by the University Libraries, University of Arizona. Further transmission, reproduction or presentation (such as public display or performance) of protected items is prohibited except with permission of the author.
Abstract:
This study reports the results of experimental laboratory markets designed to test two propositions set forth by Verrecchia 1982 . The first proposition addressed the change in the level of private information acquisition given a change in the level of public information in a competitive market. The second proposition considered the amount of informedness in the market given an increase in the level of public information and the resultant change in private information. The development of these propositions was motivated by the ambiguous results produced from the market-based accounting research investigating the impact on market price of mandated accounting disclosures. A limitation of the market based research is the inability to control for changes in the level of private information acquisition given a change in the level of public information which may explain the ambiguous results. A laboratory markets method was used to test the propositions because of the control provided by this research method. The market mechanism employed was a version of the PLATO computerized double-auction mechanism described by Smith, Suchanek, and Williams 1985 . This trading mechanism allows traders to communicate bids and offers and to form contracts to buy and sell assets in a computerized market which provides a high degree of control. In addition to the market for assets, a posted offer market for private information was used to allow traders to acquire private information. The results show significant decreases in private information acquisition in markets with higher levels of public information. Thus, public and private information appear to be substitute goods in this experimental setting. The results also indicates that the variance of contract prices around the true dividend value is significantly greater in markets with lower levels of public information. This remains true when controlling for possible confounding variables including market day, the contract number, the dollar value of private information, and the number of informed traders that executed the contract.
Type:
text; Dissertation-Reproduction (electronic)
Keywords:
Disclosure in accounting.; Financial statements -- United States.; Marketing.
Degree Name:
Ph.D.
Degree Level:
doctoral
Degree Program:
Business Administration; Graduate College
Degree Grantor:
University of Arizona
Advisor:
Barefield, Russell

Full metadata record

DC FieldValue Language
dc.language.isoenen_US
dc.titleEFFECTS OF CHANGES IN THE LEVEL OF PUBLIC DISCLOSURE ON THE ACQUISITION OF PRIVATE INFORMATION: AN EXPERIMENTAL MARKETS INVESTIGATION.en_US
dc.creatorKING, RONALD RAYMOND.en_US
dc.contributor.authorKING, RONALD RAYMOND.en_US
dc.date.issued1986en_US
dc.publisherThe University of Arizona.en_US
dc.rightsCopyright © is held by the author. Digital access to this material is made possible by the University Libraries, University of Arizona. Further transmission, reproduction or presentation (such as public display or performance) of protected items is prohibited except with permission of the author.en_US
dc.description.abstractThis study reports the results of experimental laboratory markets designed to test two propositions set forth by Verrecchia 1982 . The first proposition addressed the change in the level of private information acquisition given a change in the level of public information in a competitive market. The second proposition considered the amount of informedness in the market given an increase in the level of public information and the resultant change in private information. The development of these propositions was motivated by the ambiguous results produced from the market-based accounting research investigating the impact on market price of mandated accounting disclosures. A limitation of the market based research is the inability to control for changes in the level of private information acquisition given a change in the level of public information which may explain the ambiguous results. A laboratory markets method was used to test the propositions because of the control provided by this research method. The market mechanism employed was a version of the PLATO computerized double-auction mechanism described by Smith, Suchanek, and Williams 1985 . This trading mechanism allows traders to communicate bids and offers and to form contracts to buy and sell assets in a computerized market which provides a high degree of control. In addition to the market for assets, a posted offer market for private information was used to allow traders to acquire private information. The results show significant decreases in private information acquisition in markets with higher levels of public information. Thus, public and private information appear to be substitute goods in this experimental setting. The results also indicates that the variance of contract prices around the true dividend value is significantly greater in markets with lower levels of public information. This remains true when controlling for possible confounding variables including market day, the contract number, the dollar value of private information, and the number of informed traders that executed the contract.en_US
dc.typetexten_US
dc.typeDissertation-Reproduction (electronic)en_US
dc.subjectDisclosure in accounting.en_US
dc.subjectFinancial statements -- United States.en_US
dc.subjectMarketing.en_US
thesis.degree.namePh.D.en_US
thesis.degree.leveldoctoralen_US
thesis.degree.disciplineBusiness Administrationen_US
thesis.degree.disciplineGraduate Collegeen_US
thesis.degree.grantorUniversity of Arizonaen_US
dc.contributor.advisorBarefield, Russellen_US
dc.contributor.committeememberWaller, Williamen_US
dc.contributor.committeememberFelix, Williamen_US
dc.contributor.committeememberFisher, Margueriteen_US
dc.contributor.committeememberIsaac, Marken_US
dc.contributor.committeememberSmith, Vernonen_US
dc.identifier.proquest8623875en_US
dc.identifier.oclc697622724en_US
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