Criterion-referenced judgemental forecasting models

Human judgements are usually made with reference to a criteria such as cost or profit. When making a judgement model for such a decision, the ideal is for the model to yield near-optimal results in terms of the criteria. This article starts with the theory behind concave criteria and then develops a mathematical argument which gives guidance to judgemental model building. This guidance departs from the conventional wisdom of using only R-squared in model selection.