Screening (economics)

Screening in economics refers to a strategy of combating adverse selection, one of the potential decision-making complications in cases of asymmetric information. The concept of screening was first developed by Michael Spence (1973), and should be distinguished from signalling, which implies that the informed agent moves first. The actual screening process depends on the nature of the scenario, but is usually closely connected with the future relationship.

Screening (economics)

Screening in economics refers to a strategy of combating adverse selection, one of the potential decision-making complications in cases of asymmetric information. The concept of screening was first developed by Michael Spence (1973), and should be distinguished from signalling, which implies that the informed agent moves first. The actual screening process depends on the nature of the scenario, but is usually closely connected with the future relationship.