Information Production, Information Acquisition and Price Informativeness

We propose a costly information acquisition model to explore the mechanism of the process from the strategies of information acquisition to price informativeness. The profit-seeking characteristics of free-access market environments hinder the transmission channel of high-precision information from the information market to financial markets, defined as a blocking dilemma, due to the crowding-out effect. Theoretically, we demonstrate the existence of a possible path from low-precision information to high-precision information through equilibrium evolution. Appropriate intervention is necessary to overcome the dilemma, thus effectively improving the information precision and price informativeness of the capital market. We provide several feasible suggestions