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Designing More Informative Tests: Separating Execution from Recognition

Author

Listed:
  • Andrew Caplin
  • Leo Zhu

Abstract

Tests are widely used to measure ability, yet performance on a test often reflects more than the ability to execute assigned tasks. It also reflects the ability to recognize which tasks are worth attempting, how they should be prioritized, and how effort should be allocated under uncertainty. This paper studies how tests can be designed to separate these capabilities. We model a test as a sequential decision problem. Tasks differ in difficulty, their ordering is uncertain, and examinees may acquire costly information about that ordering before choosing how to proceed. The testing environment is the informational structure surrounding the realized test: in particular, the examinee's beliefs about how task difficulty has been arranged. Performance is therefore generated by an optimal recognition–execution policy, not by execution skill alone. The analysis delivers two negative results. First, even in the simplest two-task environment, a single score exhibits dimensional collapse: distinct combinations of execution skill and recognition capability generate identical expected scores. Second, with three tasks, the relationship between capabilities and scores becomes environment-dependent: changing beliefs about task ordering can change which actions are considered and how capabilities translate into performance. These results imply that standard scores are not generally informative enough to separate the capabilities that generate performance. This matters because scores are used to summarize what individuals can do and to guide downstream decisions about placement, training, and instruction. If a test does not separately reveal execution and recognition, it provides limited guidance about which capability is strong, which is weak, and where improvement should be directed. We then show how more informative tests can be designed. Under a simple communicability constraint, two canonical environments—ordered and randomized tests—induce distinct relationships between capabilities and scores. In an ordered test, recognition is suppressed and performance isolates execution. In a randomized test, recognition is activated and performance reflects both execution and recognition. Observing performance across these environments separates capabilities that are confounded in any single score. The paper reframes testing as a problem of informational design: tests should be designed not only to record performance, but to reveal the distinct capabilities that generate it.

Suggested Citation

  • Andrew Caplin & Leo Zhu, 2026. "Designing More Informative Tests: Separating Execution from Recognition," NBER Working Papers 35232, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:35232
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    More about this item

    JEL classification:

    • C90 - Mathematical and Quantitative Methods - - Design of Experiments - - - General
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • I21 - Health, Education, and Welfare - - Education - - - Analysis of Education
    • I24 - Health, Education, and Welfare - - Education - - - Education and Inequality
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes

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