Voluntary disclosure of verifiable information with general preferences and information endowment uncertainty

Abstract

We study a voluntary disclosure model with verifiable information, a range of sender and receiver preferences, and uncertainty about whether the sender is informed. When a sender's preferences are insensitive to the state relative to the receiver's, a sender discloses moderate news and suppresses extreme news. We also find a partial revelation equilibrium where the sender's message is an interval containing the realized state. When a sender's preferences are sensitive to the state relative to the receiver's, the sender withholds moderate news and discloses extreme news. The latter disclosure is more consistent with extant empirical findings about voluntary managerial disclosure.