  Interacting agents receive public information at no cost and flexibly acquire
private information at a cost proportional to entropy reduction. When a
policymaker provides more public information, agents acquire less private
information, thus lowering information costs. Does more public information
raise or reduce uncertainty faced by agents? Is it beneficial or detrimental to
welfare? To address these questions, we examine the impacts of public
information on flexible information acquisition in a linear-quadratic-Gaussian
game with arbitrary quadratic material welfare. More public information raises
uncertainty if and only if the game exhibits strategic complementarity, which
can be harmful to welfare. However, when agents acquire a large amount of
information, more provision of public information increases welfare through a
substantial reduction in the cost of information. We give a necessary and
sufficient condition for welfare to increase with public information and
identify optimal public information disclosure, which is either full or partial
disclosure depending upon the welfare function and the slope of the best
response.
