An intelligent agent diagnoses perceived problems so that it can respo
nd to them appropriately. Basically, the agent performs a series of te
sts whose results discriminate among competing hypotheses. Given a spe
cific diagnosis, the agent performs the associated action. Using the t
raditional information-theoretic heuristic to order diagnostic tests i
n a decision tree, the agent can maximize the information obtained fro
m each successive test and thereby minimize the average time (number o
f tests) required to complete a diagnosis and perform the appropriate
action. However, in real-time domains, even the optimal sequence of te
sts cannot always be performed in the time available. Nonetheless, the
agent must respond. For agents operating in real-time domains, we pro
pose an alternative action-based approach in which: (a) each node in t
he diagnosis tree is augmented to include an ordered set of actions, e
ach of which has positive utility for all of its children in the tree;
and (b) the tree is structured to maximize the expected utility of th
e action available at each node. Upon perceiving a problem, the agent
works its way through the tree, performing tests that discriminate amo
ng successively smaller subsets of potential faults. When a deadline o
ccurs, the agent performs the best available action associated with th
e most specific node it has reached so far. Although the action-based
approach does not minimize the time required to complete a specific di
agnosis, it provides positive utility responses, with step-wise improv
ements in expected utility, throughout the diagnosis process. We prese
nt theoretical and empirical results contrasting the advantages and di
sadvantages of the information-theoretic and action-based approaches.