NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH
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Information: Hard and Soft

José María Liberti, Mitchell A. Petersen

NBER Working Paper No. 25075
Issued in September 2018
NBER Program(s):Corporate Finance

Information is a fundamental component of all financial transactions and markets, but it can arrive in multiple forms. We define what is meant by hard and soft information and describe the relative advantages of each. Hard information is quantitative, easy to store and transmit in impersonal ways, and its information content is independent of its collection. As technology changes the way we collect, process, and communicate information, it changes the structure of markets, design of financial intermediaries, and the incentives to use or misuse information. We survey the literature to understand how these concepts influence the continued evolution of financial markets and institutions.

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Document Object Identifier (DOI): 10.3386/w25075

Published: José María Liberti & Mitchell A Petersen, 2019. "Information: Hard and Soft," The Review of Corporate Finance Studies, vol 8(1), pages 1-41.

 
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