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The Price of Disclosure in the Thoroughbred Yearling Market

Published online by Cambridge University Press:  26 January 2015

Emily J. Plant
Affiliation:
School of Business Administration, The University of Montana, Missoula, Montana
C. Jill Stowe
Affiliation:
Department of Agricultural Economics, University of Kentucky, Lexington, Kentucky

Extract

In this article, we examine disclosure as a tool to mitigate the effects of asymmetric information in a Thoroughbred yearling market. If disclosures influence market price, information contained therein must be valuable to buyers and hence diminish asymmetric information. Using public auction data, we find that disclosures do not influence price in a segment of the auction in which an implicit quality certification is available. However, in the other segment, we find evidence that some disclosures may provide valuable information to buyers.

Type
Research Article
Copyright
Copyright © Southern Agricultural Economics Association 2013

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