Complex Disclosure

We present evidence that complex disclosure can result from the strategic incentives to shroud information. We implement an experiment where senders are required to report their private information truthfully but can choose how complex to make their reports. We find that senders use complex disclosure over half the time. Most of this obfuscation is profitable because receivers make systematic mistakes in assessing complex reports. Receivers understand that senders are using complexity to hide bad news. However, strategic complexity is still effective, which can be attributed to receivers being overconfident in their ability to process complex information