DECISION-MAKING AND UTILITY by jcu17225

VIEWS: 7 PAGES: 10

									   DECISION-MAKING AND
         UTILITY


• METHOD SELECTION

• OBTAINING ACCEPTANCE
   MULTIPLE PREDICTORS
• ONE PREDICTOR – REGRESSION
     ^
     y = a + b(x)
• > 1 – MULTIPLE REGRESSION
     ^
     y = a + b1(x1)+ b2(x2)
    IF a = 2, bx1 = .4 , bx2 = .7
    IF X1 = 30 and X2 = 40
     y = 2 + .4x1 + .7x2
     y = 2 + .4(30) + .7(40) = 42

• NO THEORY TO GUIDE

• APPLICATION GUIDES SELECTION
SELECTION STRATEGIES #1

• MULTIPLE REGRESSION
    MINIMIZES ERROR
    COMPENSATORY
• MULTIPLE CUTOFF
    CUT FOR EACH SET
     10 FOR INTERVIEW
     25 FOR CA TEST
    DIFFICULT TO VALIDLY SET
SELECTION STRATEGIES #2

• MULTIPLE HURDLE
   ADMINISTERED OVER TIME
    + DON’T ALL TESTS
    - TIME AND COST
• DOUBLE STAGE
   TWO CUT SCORES
• PROFILE MATCHING
    PLOT TO AVG SET VALID PRED
  SELECTION OUTCOMES

• OUTCOMES
   TRUE POSITIVES (1)
   FALSE POSITIVES (2)
   TRUE NEGATIVES (3)
   FALSE NEGATIVES (4)

• HOW ACCURATE ARE DECISIONS?
     HOW ACCURATE ARE
        DECISIONS?
PROPORTION OF CORRECT DECISIONS
         1+3
PCTOT ----------------
       1+2+3+4
   ALL OUTCOMES EQUAL

PROPORTION OF ACCEPTED ARE SATISFACTORY
             1
 PCACC ----------------
           1+2
         UTILITY #1

• INDEX OF FORECASTING EFFICIENCY
   e = 1 - (1-rxy2)1/2
• COEFFICIENT OF DETERMINATION
     rxy2
• TAYLOR-RUSSELL TABLES
• Brogden-Cronbach-Gleser
                     __
    U = N T rxy sdy Z - Nt(Cp)
                 UTILITY #2

• COMPARE TWO TESTS
     Unew - Uold
• PER SELECTEE
                          _
  U/selectee = T rxy sdy Z – Cp

• HIGH ULTILITY WITH LOW VALIDITY
                    rxy Zx    sdy   U/selectee
 MID LEVEL JOB
 (systems analyst) .20 1.00 $25,000    $5,000

LOW LEVEL JOB
(janitor)             .60   1.00   $2,000   $1,200
SCHMIDT & HUNTER (1998)


• PURPOSE
   EXAMINES 19 MEASURES
   WITHOUT PRIOR EXPERIENCE
• META ANALYSIS
   JOB PERFORMANCE
    WORK SAMPLE – GMA -STRUC INT
    TRAINING
      GMA – INTEGRITY
  MURPHY (1986)
• DISTINGUISH OFFER & ACCEPTED
• CASE 1
   REJECTED AT RANDOM
• CASE 2
   BEST REJECT
• CASE 3
   NEG r ABILITY/ACCEPT

								
To top