Information orders in screening problems

Abstract

This paper studies information orders in screening models. I amend a general screening problem with a signal about the agent's type. The principal prefers one signal to another for any preferences of principal and agent if and only if the signals are ranked by Blackwell's order. Under a standard regularity condition, a novel information order – the hazard rate spread (HRS) order – characterizes a robust ranking of signals by the principal. I relate the HRS order to well-known information orders and provide sufficient conditions for other welfare measures than the principal's payoff to increase or decrease in the HRS order.