Research On Public Information Disclosure In Overconfidence Market

Information has an impact on stock pricing.However,most investors fail to obtain all the information concerning about stock price,which may lead to the information asymmetry.Information asymmetry could cause investors to make erroneous decisions,resulting in the inefficient of stock market.Therefore,Chinese stock market has gradually formed a relatively complete mandatory information disclosure system.It is worth noting that the current situation of information disclosure about listed company in China is not optimistic.Investors tend to show irrational behaviors such as overconfidence.Based on financial market microstructure theory,we adoptthe rational expectation idea,establishing models by adjusting the form of public information disclosure and introducing the concept of investor overconfidence,at the same time,discussing the relationship between public information disclosure and stock market respectively when the proportion of informed traders and uninformed traders is exogenous and endogenous.The contentand main conclusions are as follows:Firstly,we build models from the perspective of exogenous private information,analyzing the changes of price informativeness,cost of capital and liquidity.The results show that when the listed company discloses illusive information,increasing the precision of the artificial manipulation part will increase price informativeness,reducing cost of capital and increasing liquidity.When there is difficulty effect,the changes of the market equilibrium characteristics above are uncertain,and even the opposite result may occur,depending on the influence of difficulty effect on the degree of investor overconfidence.Secondly,this study assumes that investors need to pay for private information,and then discuss the possibility of substitution effect and complementary effect,and changes in market equilibrium characteristics.Our research finds that when difficulty effect is weak,there is a substitution effect in information market.When difficulty effect is strong,there is a complementary effect in information market.At this time,the influence of increasing the precision of the artificial manipulation part on price informativeness,cost of capital and liquidity is different of financial market equilibrium.In view of this,the management should not only take the influence of difficulty effect on the degree of investor overconfidence into account,guiding investor sentiment,but also paying attention to exogenous and endogenous nature of private information when supervising public information.They ought to introduce appropriate regulatory strategies in order to make stock market a healthy development path.