Assessing and studying utility functions in psychometric decision theory

In educational and industrial psychology, utilitytheory has been used for determining optimal decision-theoreticprocedures such as optimal test cutting scoresfor Pass/Fail and Accept/Reject decisions. Three methodsare described for empirically assessing utilityfunctions: (1) a method for scaling utility mixtures,consisting of a true achievement or criterion levelcombined with the probability of passing the test orbeing accepted, which is applicable for determiningoptimal decision procedures; (2) a method for scalingthe utility as a function of the true achievement or criterionlevel; and (3) a graphical procedure for choosinga utility function. These methods are useful for investigatingthe utility structure. The three methods areinvestigated using 30 students in a hypothetical educationalPass/Fail situation and appear to yield reliableinformation. Moreover, an overview of the students’utility structures is reported.