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Public signals and the equilibrium allocation of private information

Article Abstract:

The allocation of private informaion is determined to an extent by public signals in the presence of informative prices. The release of public signals tends to bring about a concentrated allocation of private signals wherein a small group of traders possess private information, while other traders are left uninformed. Concentration results from the willingness of a trader, originally possessing one private signal value, to purchase the remaining private signal at a higher price. The trader's willingness to purchase is ruled by two balancing forces. The first points to the possibility of decreasing returns as a result of increased precision. The second force illustrates the complementarity of precision and the increased informativenes resulting from two private signals utilized together.

Author: Lundholm, Russell J.
Publisher: Blackwell Publishers Ltd.
Publication Name: Journal of Accounting Research
Subject: Business
ISSN: 0021-8456
Year: 1991
Financial statements, Disclosure statements (Accounting), Information measurement

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Price-signal relations in the presence of correlated public and private information

Article Abstract:

The notion that improved news stimulates higher prices can fail when mistakes on private and public information signals are adequately correlated. The relation which a researcher finds between prices and information signals will generally depend on the way in which other variables in the economy are treated. Some interesting information acquisition issues are raised by the potential for highly correlated data to cut traders' posterior variance about the future worth of the asset.

Author: Lundholm, Russell J.
Publisher: Blackwell Publishers Ltd.
Publication Name: Journal of Accounting Research
Subject: Business
ISSN: 0021-8456
Year: 1988
Prices and rates, Securities, Securities prices, Prices

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The extreme future stock returns following I/B/E/S earnings surprise

Article Abstract:

Financial earnings projections and persistency of unexpected earnings for more than three years is evaluated.

Author: Lundholm, Russell J., Soliman, Mark T., Doyle, Jeffrey T.
Publisher: Blackwell Publishers Ltd.
Publication Name: Journal of Accounting Research
Subject: Business
ISSN: 0021-8456
Year: 2006
United States, Capital funds & cash flow, Evaluation, Accounting and auditing, Income statements, Capital gains

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Subjects list: Research
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