Optimal disclosure decisions when there are penalties for nondisclosure

Ronald A. Dye*

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

19 Scopus citations


We study a seller of an asset who is liable for damages if the seller fails to disclose to buyers an estimate of the asset's value he knew prior to the sale. Our results include as either the “damages multiplier” that determines the size of the damages the seller must pay buyers increases, or as the probability the seller is caught withholding his estimate from buyers increases, the seller discloses his estimate less often, and as the precision of the seller's estimate increases, he sells a larger fraction of the asset.

Original languageEnglish (US)
Pages (from-to)704-732
Number of pages29
JournalRAND Journal of Economics
Issue number3
StatePublished - Sep 1 2017

ASJC Scopus subject areas

  • Economics and Econometrics


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