What if all information is avaliable and made public?

In the financial market, some information is identified as private information, some information is identified as public information. Often illegal internal transactions are caused by private information leaks. However, what happens if we can make all information is available to all people?

Of course, such hypothesis is very unrealistic, let's just imagine a world where we could access to all information. Firstly, prices would be different, as we would have more information available, our expectations would adjust accordingly and the prices based on expectations will definitely change. This might be one positive point of making all information available to everyone. Secondly, arbitrary opportunities would largely disappear, as all information is available, all states and their prices would be known, this would avoid arbitrary opportunities.

However, once all information is made available, there could be negative effects. Firstly, it could be an increase in the systematic information. Once all information is available, all people would be more likely to take similar actions. Although all information is available, it still does not mean the future is 100% certain. Once everyone in the system makes similar moves, then the system could go terribly wrong when an event with a lower probability occurs. Secondly, financial activities may slow down. Some of the financial and investment events are largely based on the risk taking and the returns from taking the risks. When all information is available, the risk would become more obvious, then people would make their actions based on their risk preferences, and they would no longer to make the judgement on the risk they would face. The financial sector often has some form of rallies; therefore, once they become more conservative, the financial market would enter a frozen period where any risky actions will be abandoned. Because they have the same judgement on risk as all information is available, they would make almost the same actions. Conservative strategies are more welcome by the general public, as we are afraid aggressive moves made by the financial institutions. Therefore, the innovations in the financial institutions would slow down very much.