Abstract
A new utility analysis approach is presented. It is demonstrated that the new approach does not require the direct estimation of the most problematic component of current utility analysis equations, the standard deviation of Y. The parsimony of the new approach provides the potential for more directly linking decision-theoretic utility analysis with economic and accounting concepts. The development of the new approach highlights the many necessary and untested assumptions of current utility models. It also points to a need for reassessing the psychometric validity of correcting for criterion unreliability in utility analysis. Furthermore, the CREPID and 40% and 70% rules for estimating the standard deviation of Y are shown to be special cases of the new approach. Research on the efficacy of the assumptions and applicability of the new approach is advocated.
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Disclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.