search query: @indexterm rational expectations / total: 97
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| Author: | Frantz, P. Walker, M. |
| Title: | Information disclosure to employees and rational expectations: A game-theoretical perspective |
| Journal: | Journal of Business Finance and Accounting
1997 : OCT-DEC, VOL. 24:9, p. 1421-1431 |
| Index terms: | DISCLOSURE INFORMATION EMPLOYEES RATIONAL EXPECTATIONS GAME THEORY |
| Language: | eng |
| Abstract: | This article analyses the voluntary disclosure strategies of a privately informed company manager when the information is relevant to both a financial market for valuation purposes and a union for wage bargaining purposes. It considers an entrepreneur who has some private information concerning the profitability of a project requiring the use of labor and needs to sell shares to finance part of the required investment. It introduces a wage bargaining game in which only the union is allowed to make offers. The analysis shows that both a full-disclosure and a nondisclosure equilibrium always obtain. The existence of these equilibria does not depend on the amount of capital raised by the entrepreneur. |
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