In many scenarios such as banking and liquidity crises, inefficiencies often arise because investors face uncertainties about economic fundamentals and the strategies of other investors. How information affects fundamental uncertainty is well studied, but how information affects strategic...

We consider a two-stage game with an option to analyze disclosures in the first stage, and a coordination game in the second stage. Decision makers are assumed to be heterogeneous in their ability to comprehend disclosures—sophisticated players are likely to comprehend disclosures, while...