Persuading Large Investors
| Autor: | Ricardo Alonso, Konstantinos E. Zachariadis |
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| Rok vydání: | 2021 |
| Předmět: | |
| Zdroj: | SSRN Electronic Journal. |
| ISSN: | 1556-5068 |
| DOI: | 10.2139/ssrn.3781499 |
| Popis: | A regulator who designs a public stress test to avert default of a distressed bank via private investment must account for large investors' private information on the bank's state. We provide conditions for crowding-in (crowding-out) so that the regulator offers more (less) information to better-informed investors. Crowding-in obtains if investors' private information is not too discriminating of the state. We show that the region of the common prior is consequential: if crowding-in occurs for ex-ante optimistic investors then crowding-out follows if they were instead pessimistic. Investors' value from more precise private signals may come from their effect on the public test's precision. |
| Databáze: | OpenAIRE |
| Externí odkaz: |
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