A taxonomy of disclosure policies

Varda Yaari

Research output: Contribution to journalArticlepeer-review

2 Scopus citations

Abstract

The disclosure policy of the firm defines the relationship between the actual outcome and the reported outcome. This paper offers a taxonomy of disclosur policies by analyzing the Nash equilibrium contract of the owner and the manager. The variety among firms is explained by different combinations (of preferences) of owner-manager pairings. When the owner's aversion to risk changes more slowly (quickly) than the manager's, the firm is a smoother (a maximizer). The firm tells the truth only the owner's and the manager's preferences behave the same.

Original languageEnglish
Pages (from-to)361-374
Number of pages14
JournalJournal of Economics and Business
Volume45
Issue number5
DOIs
StatePublished - 1 Jan 1993

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