The theory of voluntary disclosure of information posits that market forces lead senders to disclose information …-disclosure as bad news, leading to the failure of complete unravelling. This paper experimentally examines whether competition … examine whether receivers' naivety about non-disclosed information decreases with competition between senders. We find that …

competition. Sellers often choose to report a selected set of information and buyers account for this – even though not fully – by … bidding skeptically. As expected, competition increases sellers’ information disclosure but leads, surprisingly and replicably … perceive competition as a safer environment to which they behaviorally adapt by abandoning their skepticism. In comparison …