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Are grade expectations rational? A classroom experiment

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  • Belayet Hossain
  • Panagiotis Tsigaris

Abstract

This study examines students' expectations about their final grade. An attempt is made to determine whether students form expectations rationally. Expectations in economics, rational or otherwise, carry valuable information and have important implications in terms of both teaching effectiveness and the role of grades as an incentive structure for students. This study focuses on the predictors of the students' final grade as they relate to their expectations. Our findings indicate that on average, the rational expectations (REs) framework does not accurately describe students' grade expectations. Expectations, although sluggish, improve as students gather information on their actual performance during the semester. Even though overconfidence is the norm, there could be some students who follow closely the REs hypothesis.

Suggested Citation

  • Belayet Hossain & Panagiotis Tsigaris, 2015. "Are grade expectations rational? A classroom experiment," Education Economics, Taylor & Francis Journals, vol. 23(2), pages 199-212, April.
    • Handle: RePEc:taf:edecon:v:23:y:2015:i:2:p:199-212
    DOI: 10.1080/09645292.2012.735073
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    Cited by:

    1. Kai Hao Yang & Alexander K. Zentefis, 2023. "Extreme Points of First-Order Stochastic Dominance Intervals: Theory and Applications," Cowles Foundation Discussion Papers 2355, Cowles Foundation for Research in Economics, Yale University.
    2. Gerardo Sabater-Grande & Nikolaos Georgantzís & Noemí Herranz-Zarzoso, 2023. "Goals and guesses as reference points: a field experiment on student performance," Theory and Decision, Springer, vol. 94(2), pages 249-274, February.
    3. Martin Pinquart & Martin C. Pietzsch, 2022. "Change in Students’ Educational Expectations – A Meta-Analysis," Journal of Educational and Developmental Psychology, Canadian Center of Science and Education, vol. 12(1), pages 1-43, May.
    4. Kai Hao Yang & Alexander K. Zentefis, 2023. "The Economics of Monotone Function Intervals," Papers 2302.03135, arXiv.org, revised Feb 2024.
    5. Dirk S. Yandell, 2017. "Grade Expectations and Overconfidence: Is Economics Different?," Journal for Economic Educators, Middle Tennessee State University, Business and Economic Research Center, vol. 17(2), pages 18-28, Fall.
    6. Noemí Herranz-Zarzoso & Gerardo Sabater-Grande, 2020. "Monetary incentives and overconfidence in academic performance: An experimental study," Working Papers 2020/14, Economics Department, Universitat Jaume I, Castellón (Spain).
    7. Oscar David Marcenaro-Gutierrez & Luis Alejandro Lopez-Agudo, 2017. "The Influence of the Gap Between Parental and Their Children’s Expectations on Children’s Academic Attainment," Child Indicators Research, Springer;The International Society of Child Indicators (ISCI), vol. 10(1), pages 57-80, March.
    8. Jan R. Magnus & Anatoly A. Peresetsky, 2017. "Grade Expectations: Rationality and Overconfidence," Tinbergen Institute Discussion Papers 17-054/III, Tinbergen Institute.
    9. Sawler, James, 2021. "Economics 101-ism and the Dunning-Kruger effect: Reducing overconfidence among introductory macroeconomics students," International Review of Economics Education, Elsevier, vol. 36(C).

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