Grading Exams: 100, 99, 98,...or A, B, C?

Pradeep Dubey and John Geanakoplos ()
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Pradeep Dubey: SUNY, Stonybrook
John Geanakoplos: Cowles Foundation, Yale University, http://cowles.econ.yale.edu/faculty/geanakoplos.htm

No 1710, Cowles Foundation Discussion Papers from Cowles Foundation, Yale University

Abstract: We introduce grading into games of status. Each player chooses effort, pro­ducing a stochastic output or score. Utilities depend on the ranking of all the scores. By clustering scores into grades, the ranking is coarsened, and the incen­tives to work are changed. We apply games of status to grading exams. Our main conclusion is that if students care primarily about their status (relative rank) in class, they are often best motivated to work not by revealing their exact numerical exam scores (100, 99, ...,1), but instead by clumping them into coarse categories (A,B,C). When student abilities are disparate, the optimal absolute grading scheme is always coarse. Furthermore, it awards fewer A’s than there are alpha-quality students, creating small elites. When students are homogeneous, we characterize optimal absolute grading schemes in terms of the stochastic dominance between student performances (when they shirk or work) on subintervals of scores, show­ing again why coarse grading may be advantageous. In both the disparate case and the homogeneous case, we prove that ab­solute grading is better than grading on a curve, provided student scores are independent.

Keywords: Status; Grading; Incentives; Education; Exams (search for similar items in EconPapers)
JEL-codes: C70 I20 I30 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cta, nep-edu, nep-gth and nep-lab
Date: 2009-06
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