This paper studies the effect of mandated disclosure policies when firms can use unnecessary complexity to withhold relevant information from consumers endowed with a private outside option. When the cost that consumers have to pay to solve the complexity is too high, mandated disclosure policies are completely ineffective and firms are de facto allowed to decide which information is disclosed and which one is censored. In contrast, when consumers can afford to pay the cost that enable them to understand the complex information, the effectiveness of the policy depends on the distribution of their outside option, along with the level of the cost. This paper derives simple conditions for consumers' optimal strategy and exploits them to define an algorithm that identifies the optimal disclosure rule under general distributional assumption. These findings can inform regulators about the heterogeneous efficacy of mandated disclosure policies in different contexts.

Economic agents often have private verifiable information about multiple attributes characterizing their product or service. Since selectively disclosing only certain attributes can make information withholding more salient, we experimentally study how the dimensionality of the information space affects receivers’ skepticism about undisclosed information and hence senders’ disclosure incentives. We find that increasing the number of attributes from one to two leads to more disclosure of unfavorable information. By eliciting players’ beliefs, we show that this effect is driven by senders expecting more skepticism about undisclosed dimensions. Nonetheless, receivers do not exhibit any significant behavior change, making senders’ strategy sub-optimal.

We conduct an experimental analysis of selective disclosure in communication. In our model, an informed sender aims to influence a receiver by disclosing verifiable evidence that is selected from a larger pool of available evidence. Our experimental design leverages the rich comparative statics predictions of this model, enabling a systematic test of the relative importance of evidence selection versus evidence concealment in communication. Our findings confirm the key qualitative predictions of the theory, suggesting that selection, rather than concealment, is often the dominant distortion in communication. We also identify deviations from the theory: A minority of senders overcommunicate relative to predictions, while some receivers partially neglect the selective nature of the evidence they observe.

In a communication game between a privately informed sender and a population of heterogeneous receivers, this paper studies sender's disclosure decisions when information is intrinsically complex and the sender can choose both the content of the disclosure and the receivers' information acquisition cost. First, it shows that the existence of a share of receivers suffering from selection neglect makes excessive information production and obfuscation robust equilibrium predictions. Then, the model is extended to study how information production changes with sender's competition. Competition is modeled through an exogenous outside option available to the receiver. The main finding is that the volume of information and obfuscation are non-monotonic in the outside option, first increasing and then decreasing. For low values of the outside option, unsophisticated receivers tend to mistakenly overestimate the value of information, while sophisticated receivers tend to stay uninformed. This dynamic allows the informed party to extract rent through information manipulation and it has negative effects on the welfare of the uninformed parties. This suggests that understanding the effect of information design on information acquisition choices is crucial as policies will affect the different types of buyers in different ways.