CEU Electronic Theses and Dissertations, 2014
| Author | Reshidi, Edona |
|---|---|
| Title | Is Relative Grading an Incentive towards Segregation? |
| Summary | In this paper I analyse students’ course choice under relative and absolute grading systems. I build a strategic group formation model where heterogeneous students simultaneously choose between two courses. Students differ in their types; they are either good or bad. While all the bad students are modelled as grade motivated, there is a share among good type students that exhibit course specific preferences. Results show that, under relative grading, the model has two types of equilibria, interior where the share of good and bad students is equal in both classes, and corner where students of each type are segregated in separate classes. In the special case, when only bad students are grade motivated, only corner equilibria turn out to be stable. This result implies that the relative grading system induces students to segregate by type. No such incentive towards segregation is found when absolute grading is used. |
| Supervisor | Szeidl, Adam |
| Department | Economics MA |
| Full text | https://www.etd.ceu.edu/2014/reshidi_edona.pdf |
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