Screening
Version 1.0.0 · Updated 2026-07-30
CORE DEFINITION
Under information asymmetry, the party lacking information designs a mechanism or contract to induce the informed party to reveal their true type or information. Scaffolding role: mechanism design for information acquisition. Typical examples include insurance companies offering policies with different deductibles to screen customer risk types, and employers using probation periods to screen employee abilities. An effective screening mechanism must incentivize different types of participants to choose different options.
SCAFFOLDING EFFECT
Reduce cognitive load
Mechanism design for information acquisition. Typical examples include insurance companies offering policies with different deductibles to screen customer risk types, and employers using probation periods to screen employee abilities. An effective screening mechanism must incentivize different types of participants to choose different options.
Anchor fast decisions
By applying a set of criteria to a large number of objects, quickly eliminating those that do not meet the criteria and retaining candidates, it serves as a preprocessing step to reduce subsequent processing costs.
MINIMUM ACTION
In progress 0/4Practice this model in one real situation:
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Source support: Explicit
- en.wikipedia.orghttps://en.wikipedia.org/wiki/Screeningverified
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