Recent literature demonstrates that expectations of how investors will process information can affect the nature of the information that reaches investors in the first place. However, it does not yet deeply explore the mechanisms by which managers’ expectations form. In two laboratory experiments and a survey, this study examines how one systematic bias can affect the formation of managers’ expectations, and can cause unintentional distortion in managers’ selection of disclosure mediums by which to release information. Results from the first experiment indicate participants’ utilization of more sensory (video) disclosure mediums is reduced in response to expectations of algorithm-based information processing. Yet results from the second experiment indicate that participants’ trust in assessments of sensory information in video disclosure mediums is greater in response to algorithm-based information processing. Each of these findings is influenced by participants’ formation of inconsistent beliefs about the information processing abilities of individuals and algorithms when their perspectives are flipped from issuing disclosures to processing disclosures. This finding is consistent with an egocentric focus in perspective taking bias that extends prior psychology literature on the Spotlight Effect and the Illusion of Transparency. This bias can be represented through a two-stage psychological mechanism involving (1) the formation of a setting-specific egocentric default perspective and (2) insufficient adjustment away from this perspective for more similar vs. less similar others. This study contributes to existing literature on financial disclosure, and introduces the role of cognitive biases in influencing managers’ formation of information processing expectations.