A designer relies on a costly screening device to allocate a set of goods, aiming to maximize a social welfare function. We provide conditions for one screening device to dominate another. We show that the performance of a screening device depends on two channels: (i) targeting effectiveness which measures the alignment between the implemented and desired assignments, and (ii) rent provision which determines the utilities of agents receiving the goods net of the screening costs. We link these two channels to distinct properties of the joint distribution of agents’ characteristics, leading to a number of simple empirical tests for comparing screening devices.
Unpublished version
2023
Frank Yang
Mohammad Akbarpour
@article{akbarpour2023comparison,
title={Comparison of Screening Devices},
author={Akbarpour, Mohammad and Dworczak, Piotr and Yang, Frank},
journal={Available at SSRN 4456198},
year={2023}
}