Beker, Pablo and Cuevas, Conrado (2018) The social value of information in economies with mandatory savings. Working Paper. Coventry: University of Warwick. Department of Economics. Warwick economics research papers series (WERPS), 2018 (1152). (Unpublished)

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Abstract

We study the value of public information in a stochastic exchange economy where agents trade assets to reallocate risk and mandatory (retirement) savings imposes a lower bound on the market value of some agents' holdings of a nancial asset. Since equilibrium prices depend on the agents' beliefs about the states of nature, the arrival of information shifts the agents' mandatory savings constraints. We show that the arrival of public information can generate an ex-ante Pareto improvement relative to an uninformative equilibrium even when ex-post improvements are not possible.

Item Type:	Working or Discussion Paper (Working Paper)
Subjects:	H Social Sciences > HG Finance
Divisions:	Faculty of Social Sciences > Economics
Library of Congress Subject Headings (LCSH):	Individual retirement accounts, Finance -- Mathematical models
Series Name:	Warwick economics research papers series (WERPS)
Publisher:	University of Warwick. Department of Economics
Place of Publication:	Coventry
ISSN:	0083-7350
Official Date:	January 2018
Dates:	Date Event January 2018 Available
Volume:	2018
Number:	1152
Number of Pages:	37
Institution:	University of Warwick
Status:	Not Peer Reviewed
Publication Status:	Unpublished
Access rights to Published version:	Open Access (Creative Commons)
Description:	This paper also appears as CRETA Discussion Paper No: 40

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