Cost, a unidimensional additive non‐negative parameter, is defined and developed. Four models for the cost incurred in making a psychophysical decision are presented; two of these models are based on signal detectability theory and two are based on choice theory. In all models, cost is a function of the discriminability of the stimuli presented and the observer's response bias, and it is shown that in three of the models the form of this function depends critically on discriminability. The models are applied to the analysis of a reaction‐time study, a vigilance study, and the statistical properties of the consonant systems of four natural langua