When Two or More Information Producers Coalesce by Forming a Financial

Multiple Choice

When two or more information producers coalesce by forming a financial intermediary to cooperatively generate information about particular firms,

A) there is a diversification effect which serves to reduce the risk of individual information producers
B) there is an increase in the expected cost of information production since the firm that hires the information producers have to pay more
C) the individual information producers can increase their expected utility and to the extent that the benefits of this increased utility is shared with the firm, there is a reduction in the expected cost of information production
D) both a and b
E) both a and c