AbstractIn the framework of static mechanism design games with non- pecuniary rewards, we solve for optimal student grading schemes and attempt to explain the observed mismatch between students? grades and their abilities. The model predicts that the more pes- simistic the teacher is about her students, the more generous she should be in grading them. Generally, the "no distortion at the top" property ceases to hold for optimal contracts with cost- less non-pecuniary rewards, and we argue that the compression of ratings as witnessed in job performance appraisals could be an equilibrium outcome. The presented theoretical ?ndings are strongly supported by empirical evidence from the related litera- ture in psychological and educational measurement.
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Bibliographic InfoPaper provided by University of Zurich, Institute for Strategy and Business Economics (ISU) in its series Economics of Education Working Paper Series with number 0027.
Length: 27 pages
Date of creation: Mar 2008
Date of revision:
Mechanism design; non-pecuniary incentives; op- timal grading schemes; mismatch of grades and abilities; com- pression of ratings;
Other versions of this item:
- D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
- D86 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Economics of Contract Law
- I20 - Health, Education, and Welfare - - Education - - - General
- J41 - Labor and Demographic Economics - - Particular Labor Markets - - - Labor Contracts
This paper has been announced in the following NEP Reports:
- NEP-ALL-2008-05-31 (All new papers)
- NEP-CTA-2008-05-31 (Contract Theory & Applications)
- NEP-LAB-2008-05-31 (Labour Economics)
- NEP-URE-2008-05-31 (Urban & Real Estate Economics)
You can help add them by filling out this form.
Blog mentionsAs found by EconAcademics.org, the blog aggregator for Economics research:
- Make good grades costly to teachers
by Economic Logician in Economic Logic on 2010-07-06 14:23:00
- Botemedel mot betygsinflation?
by Niclas Berggren in Nonicoclolasos on 2010-07-07 09:27:06
- Cid, Alejandro & Cabrera, José María, 2012.
"Joint Liability vs. Individual Incentives in the Classroom. Lessons from a Field Experiment with Undergraduate Students,"
39907, University Library of Munich, Germany.
- Alejandro Cid & José María Cabrera, 2012. "Joint-Liability vs. Individual Incentives in the Classroom. Lessons from a Field Experiment with Undergraduate Students," Documentos de Trabajo/Working Papers 1206, Facultad de Ciencias Empresariales y Economia. Universidad de Montevideo..
- Ehlers, Tim & Schwager, Robert, 2012. "Honest grading, grade inflation and reputation," Center for European, Governance and Economic Development Research Discussion Papers 143, University of Goettingen, Department of Economics.
- Ehlers, Tim & Schwager, Robert, 2012. "Honest Grading, Grade Inflation and Reputation," Annual Conference 2012 (Goettingen): New Approaches and Challenges for the Labor Market of the 21st Century 62051, Verein für Socialpolitik / German Economic Association.
- Florian Birkenfeld & Shima'a Hanafy, 2008. "Was macht eine zentrale Abschlussprüfung aus?," Economics of Education Working Paper Series 0033, University of Zurich, Institute for Strategy and Business Economics (ISU).
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