Discussion paper

DP17760 On the Voluntary Disclosure of Redundant Information

Why do firms engage in costly, voluntary disclosure of information which is subsumed
by a later announcement? We consider a model in which the firm’s manager
can choose to disclose short-term information which becomes redundant later. When
disclosure costs are sufficiently low, the manager discloses even if she only cares about
the long-term price of the firm. Intuitively, by disclosing, she causes early investors to
trade less aggressively, reducing price informativeness, which in turn increases information
acquisition by late investors. The subsequent increase in acquisition more than
offsets the initial decrease in price informativeness and, consequently, improves long
term prices.


Kaniel, R, S Banerjee, B Breon-Drish and I Kremer (2022), ‘DP17760 On the Voluntary Disclosure of Redundant Information‘, CEPR Discussion Paper No. 17760. CEPR Press, Paris & London. https://cepr.org/publications/dp17760