This paper addresses the question of how public announcements can affect social
welfare in an experimental asset market with costly private information acquisition.
More specifically, we analyze how public information affects (i) the aggregate profits
and (ii) the level of inequality in the distribution of profits across subjects. Using the
data of Ruiz-Buforn et al. (2018), we show that public information disclosure always
increases aggregate profits, since it crowds out private information reducing the
informational costs. Nevertheless, the effects on the level of wealth inequality are
ambiguous. They depend on the relative precision of public and private information
and, interestingly, on the realization of the public signal. Thus, public information
disclosure leads to a trade-off between increasing aggregate profits and reducing the
inequality level