Disclosure of Disaggregated Information in the Presence of Reputational Concerns

This study examines a reputation-concerned entrepreneur’s incentives to provide disaggregated information about a project’s future performance when he seeks to increase both the market price of the project and the market assessment of his ability as a project manager. Two factors determine equilibrium: (i) the informational quality of the signal related to the entrepreneur’s ability; and (ii) the magnitude of reputational concerns. If the former is relatively low, the entrepreneur with moderate reputational concerns is more likely to provide disaggregated information when the signal about the project’s overall performance is intermediate than when it is sufficiently good or bad. Also, given any value of the signal about the overall performance, this entrepreneur withholds disaggregated information when the signal about his ability is intermediate, rather than sufficiently good or bad. The comparative static results provide novel empirical predictions about disclosure of aggregate versus disaggregated information