The Influence Of The Information Quality, Investors' Information Explanatory Capability And Market Effects

Information, investors, the efficiency of market as well as the relation between them are the most important field of research. The quality of information has effects on investors'information explanatory capability (IEC), and then the investors'IEC influence the efficiency of market. First, we try to study the influence of the quality of public information and the investors'IEC on the efficiency of market basing on models of investors'precision of interpretation on information (PII), the change of price and the market trade volume under a new hypothesis of the investor's sophistication.It finds that experts'and non-experts'expectations of the value of assets have a linear relation with public information or private information which only experts can obtain. When improved the quality of public information, investors will much rely on public information, and both the experts'and non-experts'IEC will improve too. Second, in the condition of higher quality of public information, all investors'average IEC will increase, but the information asymmetry will reduce. It is because that the experts'IEC improvement has not larger as the non-experts'. And the information advantage from the PII will lessen. Third, a higher quality of public information makes the discrepancy between the experts and the non-experts decrease. And then it has effects on the stock market price seeking mechanism (MPSM). Specially, the stronger all the investors'IEC, the litter the change of stock price; the more approaching the true value of assets from public disclosure release, and the more efficiently the market price response with the release. Forth, the higher public information quality has influenced on the informationess in price and the market trade volume. The higher the public information, the more efficiently the market price release the public information , more expertise and useless information be conveyed by price to investors. And the efficiency of price and the additional information have a positive relation with public information. And the market trade volume will increase with higher public information.