Modeling incentives to disclose: Smart disclosure policy, private sector transparency and demanded disclosure

Increasing information asymmetry in the markets has spawned public policy problems that require smart disclosure policy approaches involving collaboration between governments, private entities and the general public. Such novel disclosure policies have the potential to induce more perfect information in markets by changing the decision processes by which organizations disclose information. This study investigates the motivation of data producers to contribute to voluntary disclosure within the smart disclosure context. The empirical data, collected through in-depth interviews, consists of the characteristics, attitudes and opinions of private-sector entities implementing or projected to implement smart disclosure policies. This study shows that motivations of data producers to adhere to smart disclosure policies have four dimensions: the significant role of government and civil society organizations to lay the groundwork supporting a smart disclosure policy, the economic incentives, the existence of consensus-based interoperable technology and data standardization, and government policy governing the timing and manner of disclosure. This study offers four noteworthy contributions. First, this study found significant empirical evidence indicating that economic rationales as incentives to disclose are mediated by a set of institutional conditions. Second, this study highlights the importance of government roles and the need for an institutional framework to handle efficient resource allocation between producers and consumers in the market. Third, this study proposes that smart disclosure policies engender a demanded disclosure situation in which motivation to disclose is influenced by an organization's desire to satisfy social pressures and demands from consumers. Fourth, this study found suggestive indications that a combination of technology elements, full-information product pricing, and smart disclosure policies could potentially help end-consumers to make better choices. This study concludes with a framework and suggests theoretical and practical propositions for understanding incentives for private sector transparency to support smart disclosure policy that is based on interoperable technology and open data policy. Finally, this study envisages that a combination of socio-technical systems and smart disclosure policy enables the emergence of start-up entrepreneurs who create tools to help consumers making informed decisions based on comprehensive, traceable, and trustworthy information.