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| Type | Working Paper |
| Scope | Discipline-based scholarship |
| Title | Voluntary Disclosure in Leader-Follower Games |
| Organization Unit | |
| Authors |
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| Language |
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| Institution | University of Zurich |
| Series Name | SSRN |
| Number | 4268220 |
| ISSN | 1556-5068 |
| Date | 2022 |
| Abstract Text | We study voluntary disclosure strategies in leader-follower games where firms choose real actions sequentially after simultaneously disclosing information. We show that the leader incurs an endogenous consistency cost when withholding information because it must choose a suboptimal real action to avoid that its private information is revealed to the follower. This consistency cost induces the leader to disclose more information in equilibrium than an equally informed follower. We establish this result in the context of a voluntary disclosure model with uncertain information endowment and show that it is robust under alternative modeling choices regarding the disclosure friction, the number of followers, and the impact of firms' private information on their rivals' profit. |
| Free access at | DOI |
| Digital Object Identifier | 10.2139/ssrn.4268220 |
| Other Identification Number | merlin-id:22988 |
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| Keywords | Leader-follower game, market leadership, voluntary disclosure, investment |