How much is the Exam Grade yes, really Worth? An estimate of Student danger Aversion to their Unknown final College course Grades

This study created an experimental design with i m sorry students deserve to empirically assess your risk actions with respect to exam grades within an supposed utility framework. Specifically, the writer analyzed students’ risk preferences linked with taking exams and earning a “risky” unknown great versus no taking exams and also instead obtaining a “sure” grade. Students have grade-choice decision in nonhypothetical situations that impact their actual test grades. Estimates indicate that the much more risk-averse a student is, the more willing that or she is to accept a lower details grade and also not take it an exam 보다 to run the hazard of actually acquisition it. We believe that this experimental setup and also its binding outcomes make it an easy but effective means of teaching the obtuse concept of risk aversion.

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The authors thank Jayson Lusk for his help, Diana Danforth for she time and effort, and also Peter Kennedy because that his advice and also encouragement.


1. Return this was an agribusiness class, the material covered is identical to that of a course on introduction to microeconomics.

2. Interior Review board (IRB) protocol at the college of Arkansas was adhered to for this experiment.

3. The results indicate that if a student made decision Option A because that decision 6, that or she would have received 4 extra credit points, and also if the student determined Option B, he or she would have actually received one extra credit transaction point.

4. This experiment was conducted before the very first exam. Quizzes are not offered back, and also therefore each college student is “starting” the experiment with no information about his or her grade. So, about theory speaking, the marginal energy of a suggest should be equivalent throughout students. An ext research is essential on constant risk aversion versus loved one risk aversion as students obtain a more precise photo of what their grade is most likely to be. That is, the marginal utility of a point for a student who has actually a 95 (A) would not it is in the same as the for a student with an 89 (B), one allude away from an A−.

5. Once r = 1, the organic logarithm is used; division by (1 − r) is crucial for increasing utility once r > 1.

6. Again, us hypothesize this would adjust once a class in the food was more established. This warrants additional research.

7. None of the students chose not come participate, therefore removing self-selection bias. The being said, part students arrived late to class and also were not given the opportunity to participate due to the fact that they to be not present for the instructions. Students were gotten rid of from the study if they walk not have actually observations because that all 3 exams.

8. The student knew beforehand the neither the test nor the course was curved, so the uncertainty pertained to exogenous instructor class adjustments to be removed.

9. The grading scale for the class was the following: A (90–100), B (80–89), C (70–79), D (60–69), and also F (table 3 were constructed so that all letter great breaks additionally fell on an interval break. The is, due to the fact that a B began at one 80, us let an interval go in between 80 and also 85; since an A began at a 90, we let one interval go between 90 and 95. In this path we might attempt come delineate if a student was partial come an A or a B. That is, going native 82 come 83 (both space Bs) will certainly not have actually much effect on the certainty equivalent, but going indigenous 89 come 90 (going indigenous a B come an A) should have a much bigger impact.

10. The last exam (exam 3) is worth 20 percent that the complete grade.

11. Once the students take it their final exams, they every knew 60 percent of your grade. The staying 40 percent to be split in between the final exam (20 percent) and also a course project (20 percent) that was early out on the last day the class. The unknown 20 percent the the great (class project) was necessary in identify the liked certainty equivalent. For example, if the last grade to be the only portion of his or her grade that was unknown, climate a student with a B median going right into the exam have to be indifferent between choosing a certainty identical of 80 or the of one 85; they are both Bs. However, because 20 percent of your grade is unknown (his or her class project), that same student should be biased towards picking the 85.

12. One possible explanation because that this is that by the third experiment, through discussion among themselves throughout the year, the students had actually learned the it was irrational to “switch ago and forth.”

13. The winner drew round 9 randomly the end of the jar, because that which she had actually selected choice A (a guaranteed 95). She was awarded a 95 together her final exam grade. The instructor additionally graded she test, on i m sorry she earned a 92, so that the winner acquired 3 clues on her last exam grade.

14. On the an initial test, students were asked what their anticipated great in the course would certainly be. No one anticipated earning listed below a C in the course, therefore D and also F were not included.

15. These two exams accounted for 40 percent of the complete grade in Intro to Agribusiness.

16. The truth that “Grade C” is not far-ranging may it is in attributed come the reality that this students go not understand the incentives of the an initial experiment. This likewise may be a duty of students’ no assessing their capacity well ~ above the an initial exam because the test layout was unknown prior to the exam.

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17. The distinction was 6.4 points and 4.3 points because that exams 2 and also 3, respectively.