Your economics professor has announced the following grading policy: For each exam,the highest score in the class will be entered as a 100%;all other scores will be entered as the percent of that top score.For example,if the highest test score is 50 out of 100,it will be counted as a perfect paper,and exams with a score of 40 out of 100 will be entered as an 80%.The final grade for the course will be determined using these adjusted percentages,with 90% and above an A,80% and above a B,70% and above a C,and below 70%,not passing.
Refer to the information given above.The students all get together and decide not to study for the next exam because if nobody does extremely well,they will all do okay.This plan:
A)requires everyone to follow their dominant strategy.
B)will be stable because there are no incentives to deviate.
C)will be unstable because there is an incentive to break the agreement.
D)is a commitment device,and thus stable.

Question

Quizplus · Accepted Answer

The best grade goes to the student who is relatively best in the class,so each student has an individual incentive to do better than the other students.

Your Economics Professor Has Announced the Following Grading Policy: for Each