Dynamic information release

This note discusses the desirability of dynamic information releases. It is argued that such releases are socially valuable because theycreate insurance opportunities that do not exist without them. These new insurance opportunities occur because new public information causes prices to change which in turn allows traders to improve the spanning ability of existing securities by dynamic trading. This argument contrasts the static argument pioneered by Hirshleifer (1971) that public information oftendestroys insurance opportunities and is therefore not socially valuable.I thank Robert Litzenberger and Jiang Wang for helpful comments. Financial support from the Royal Swedish Academy of Sciences is gratefully acknowledged. Remaining errors are my own.