Promoting Student'S Effort: Standars Versus Tournaments

. We analyze the incidence in student’s effort from implementing two different reward systems: a standard-based model and a tournament. In the former we work in detail the effects on effort due to changes in rewards, risk level, socieconomic background and passing standard, while in the later we focus on the Nash equilibrium solution for a symmetrical academic context between two students. We examine conditions under which standards perform better than tournaments in terms of induced effort, and viceversa. We show this depends crucially on the nature of the noise distorting academic achievement. Particularly relative advantage becomes a function of correlation between individual noises.