ASFEE 6 in Paris

Complex Disclosure
Ginger Jin  1@  , Michael Luca  2@  , Daniel Martin  3@  
1 : University of Maryland  (UMD)
2 : Harvard Business School  (HBS)
3 : Paris School of Economics  (PSE)

Using laboratory experiments, We implement a simple two-player disclosure game in which senders must report their type to receivers, but can make their reports complex, so that receivers have to exert cognitive effort to understand the report. I find that senders are able to use complexity to successfully conceal lower types, which indicates that receivers are not fully attentive to complex reports. It also suggests that there is a breakdown in the logic of unraveling, which generates the theoretical prediction that only simple reports should be used in equilibrium.

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