The Dark Side of Information Dissemination

For decades, there has been an important debate over how much securities regulators should focus on protecting small investors. The regulators themselves have generally aimed to create a level playing field among investors, and historically, new technology has been an integral part of accomplishing this goal. Yet many posit that providing less sophisticated investors with better access to pertinent information can also impose significant costs on other market participants, regulators, and firms. Little, however, is known empirically about whether such costs exist or when they are greatest.

In a recent study, we investigate whether broadening the dissemination of corporate disclosures … Read more