Students in three of Professor Peter Fröhlich‘s computer programming classes at Johns Hopkins University recently devised a method to game their final grades. Frolich grades exams on a curve — the highest grade in the class, whatever it may be, becomes 100 percent, and “everybody else gets a percentage relative to it.” So students collectively planned a boycott:
Because they all did, a zero was the highest score in each of the three classes, which, by the rules of Fröhlich’s curve, meant every student received an A.
“The students refused to come into the room and take the exam, so we sat there for a while: me on the inside, they on the outside,” Fröhlich said. “After about 20-30 minutes I would give up…. Then we all left.” The students waited outside the rooms to make sure that others honored the boycott, and were poised to go in if someone had. No one did, though.
Catherine Rampell discusses the strategy:
This is an amazing game theory outcome, and not one that economists would likely predict…
In this one-off final exam, there are at least two Bayesian Nash equilibria (a stable outcome, where no student has an incentive to change his strategy after considering the other students’ strategies). Equilibrium #1 is that no one takes the test, and equilibrium #2 is that everyone takes the test. Both equilibria depend on what all the students believe their peers will do.
If all students believe that everyone will boycott with 100 percent certainty, then everyone should boycott (#1). But if anyone suspects that even one person will break the boycott, then at least someone will break the boycott, and everyone else will update their choices and decide to take the exam (#2).
The problem is that Nash equilibrium theory alone doesn’t tell us what the students are more likely to do. Economists would say that the first equilibrium, where no one takes the exam, is unlikely to result because it is not “trembling hand perfect,” an idea that helped win Reinhard Selten win the Nobel Memorial Prize in Economics.
Fröhlich was impressed by the students’ scheme. “The students learned that by coming together, they can achieve something that individually they could never have done,” he wrote in an e-mail. “At a school that is known (perhaps unjustly) for competitiveness I didn’t expect that reaching such an agreement was possible.” He has, however, revised his grading policy to prevent future gaming.
(HT: Sarah Martin)