ORCID

Jeremy Bertomeu, https://orcid.org/0000-0001-6746-5767

Language

English (en)

Publication Date

9-7-2026

Abstract

This paper studies a model of optimal disclosure via two comp eting communi- cation channels, hard information whose value has been veri fied and soft disclo- sures (e.g., forecasts, unaudited statements, press relea ses). We show that certain soft disclosures may contain as much information as hard dis closures and establish that: (a) exclusive reliance on soft disclosures tends to co nvey bad news, (b) cred- ibility is greater when unfavorable information is reporte d and (c) misreporting is more likely when soft information is issued jointly with har d information. We also show that a soft report that is seemingly unbiased in expecta tion need not indicate truthful reporting. We demonstrate that imposing a mandato ry disclosure of hard information reduces the transmission of soft information, and that the aggregation of hard with soft information will turn all information soft .

Document Type

Working Paper

Author's Department

Accounting

Author's School

Olin Business School

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