Interpretation of psychophysical data from impaired-hearing individuals on intensity discrimination tasks has been confounded by the fact that some impaired individualsÂ’ performance is near-normal in quiet, whereas for others, the difference limen is elevated. This paper presents a theoretical analysis of the effects of cochlear impairments on intensity discrimination using a combination of signal detection theory and a computational auditory model. Not only were we able to replicate the trends observed in experimental data, but, by using a model, we could also establish a link between the psychophysical predictions and the underlying physiology. In doing so, we are able to support the hypothesis that the observed behavior is due to the spread of excitation.