Costly Multidimensional Screening

A screening instrument is costly if it socially wasteful and productive otherwise. principal screens an agent with multidimensional private information quasilinear preferences that are additively separable across two components: a one-dimensional component component. Can the improve upon simple mechanisms by also using instruments? We show has between components positively correlated in suitably defined sense, then simply optimal. The result holds for general type allocation spaces, allows nonlinear interdependent valuations. discuss applications to optimal regulation, labor market screening, monopoly pricing.