The economic influence of barriers to international information acquisition and, hence, of informational segmentation in international capital markets depends heavily upon the prevailing level of risk aversion. We find that these barriers are likely to have second order economic impact only....

The incentive to trade implies that all investors in the market choose to be informed although the whole of them cannot profit from the information signal. This result is due to an insurance property of information.

This paper examines necessary conditions for a demand for new information to exist. In this one-period model, investors are homogeneous, have logarithmic utility, and must decide on information acquisition before trading starts, and without knowing what other investors will do. We examine the...