Equilibrium voluntary disclosures, asset pricing, and information transfers

Ronald A Dye*, John S. Hughes

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

10 Scopus citations


We study a firm's manager's voluntary disclosure decisions and those disclosure decisions’ asset pricing, cost of capital, and information transfer effects in a model where investors trade multiple securities. We: develop new asset pricing formulas when the manager makes no disclosure that impose testable cross-equation restrictions on firms’ market values; develop a wide array of comparative statics; obtain surprising findings about nondisclosure's effects on investors’ perceptions of uncertainty about firms’ future cash flows; develop simple, interpretable expressions for firms’ cost of capital; and show how no disclosure by one firm generates informational externalities on other firms.

Original languageEnglish (US)
Pages (from-to)1-24
Number of pages24
JournalJournal of Accounting and Economics
Issue number1
StatePublished - Aug 1 2018

ASJC Scopus subject areas

  • Accounting
  • Finance
  • Economics and Econometrics

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