Many quantitative scales are constructed using cutoffs on a continuum with scores assigned to the cutoffs. This paper develops a framework for using or constructing such scales from a decision-making standpoint. It addresses questions such as: How many distinct thresholds or cutoffs on a scale (i.e., what levels of granularity) are useful for a rational agent? Where should these thresholds be placed given a rational agent's preferences and risk-orientation? Do scale score assignments have any...[Show more]
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