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. Utilities depend on the ranking of all the scores. By clustering scores into grades, the ranking is coarsened, and the incen­tives …
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incentives to work are changed. We first apply games of status to grading exams. Our main conclusion is that if students care … are disparate, the optimal wage schedule creates different grades than we found with status incentives alone. The very top … status grades are optimal as we found with status incentives alone. A bonus is paid only to scores in the top status grade …
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We show that if students care primarily about their status (relative rank) in class, they are best motivated to work not by revealing their exact numerical exam scores (100, 99, ..., 1), but instead by clumping them in broad categories (A, B, C). If their abilities are disparate, the optimal...
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