Back to Glossary

Screening

Action taken by the less-informed party in an information asymmetry to extract or induce a revelation of information from the better-informed side — an insurer offering a menu of deductible options that cause low-risk and high-risk applicants to sort themselves, for instance. The mirror image of signaling, which is initiated by the better-informed party instead.

Learn about this term

Related Terms

Vocabulary from all courses. Terms are cross-referenced to show where each concept appears.