We introduce a model of probabilistic verification in a mechanism design
setting. The principal verifies the agent's claims with statistical tests. The
agent's probability of passing each test depends on his type. In our framework,
the revelation principle holds. We characterize whether each type has an
associated test that best screens out all the other types. In that case, the
testing technology can be represented in a tractable reduced form. In a
quasilinear environment, we solve for the revenue-maximizing mechanism by
introducing a new expression for the virtual value that encodes the effect of
testing