Corporate disclosure dissemination: When more is less

David Bodoff, Hongtao Zhang

Research output: Contribution to journalArticlepeer-review


The U.S. Securities and Exchange Commission's EDGAR on the Internet (EOI) initiative greatly expanded investors' access to corporate disclosure documents. Investors refer to these documents when making investment decisions. Management science literature and the popular press assume that more complete disclosure and more widespread dissemination of these data are always beneficial. On the other hand, the analytical literature in finance and accounting shows that the benefits of disclosure, as measured by investor utility, are not straightforward. In this paper, we adopt a rational expectations equilibrium model to investigate whether investors benefit from the wider dissemination that resulted from EOI. Our analysis shows that many investors are unambiguously hurt by EOI. Moreover, even those investors who previously had no access to the documents are hurt under certain conditions. These results, which have an intuitive basis, suggest that the public policy of wider dissemination requires more carefully articulated motivations.

Original languageEnglish
Pages (from-to)455-466
Number of pages12
JournalDecision Support Systems
Issue number4
StatePublished - Jul 2003
Externally publishedYes

Bibliographical note

Funding Information:
In 1993, the National Science Foundation sponsored the EDGAR on the Internet (EOI) project [8] . The purpose of EOI was to disseminate EDGAR documents to the broad public via the Internet. EDGAR is the U.S. Securities Exchanges Commission's (SEC) online database of corporate disclosure documents such as 10-K's (annual reports), quarterly reports, proxy statements, etc. The EDGAR database contains information to support investment decisions, and EOI is essentially a decision support system.

Funding Information:
This work is supported by the Research Grants Council of Hong Kong (No. HKUST6019/99H).


  • Benefit
  • Disclosure
  • Information
  • Internet
  • Trader

ASJC Scopus subject areas

  • Management Information Systems
  • Information Systems
  • Developmental and Educational Psychology
  • Arts and Humanities (miscellaneous)
  • Information Systems and Management


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