FEATURE
PAPER
Grade Expectations
The
following paper was presented at the 2007 Allied Academies
International Conference - Jacksonville. It was written
by Kim Andrews, James Swanson, and Penny Kugler of University
of Central Missouri
Abstract
Data in previous
literature as well as data collected for this study are consistent
with two
propositions. First, students perceive economics principles
courses to be a relatively difficult.
Second, in spite of this fact, students expect to do relatively
well in these courses. For example, a
majority of over 400 students responding to a survey administered
in economics principles courses
at a Midwestern university indicated they perceived economics
to be more difficult than other
courses. In spite of this perception and regardless of academic
ability or past performance (as
indicated by variables such as high school study experiences,
ACT scores, and college grade point
average), these students expected to receive a grade of at
least 3.0 in their principles of economics
courses. These seemingly unrealistic expectations may result
from two sources: overly optimistic
aspirations and signaling.
Behavioral economics departs from the typical assumption of
unbounded rational behavior
on the part of economic agents. Instead it allows for the
fact that people often behave irrationally
both in terms of the beliefs they hold and the judgments
they make. Although psychology literature
has long discussed this attribute of behavior, Simon (1955)
was one of the first to introduce the idea
to the field of economics.
Psychology literature argues that individuals in Western
culture tend to be overly optimistic
when stating their aspirations and expectations. Lewin et
al (1944, p. 337) argue that people in
Western culture typically express aspiration levels above
their previous performance levels when
first exposed to a situation and, under most conditions,
continue to express positive goal
discrepancy. While cultural pressures for improvement can
stimulate people to greater effort, such
pressures can have negative impacts. March and Simon (1958,
p. 263) argue that not only are
aspirations revised downward in the face of positive goal
discrepancy, but such discrepancy may
result in feelings of apathy and trigger search behavior
as individuals look for alternative ways to
fulfill their goals. Cross (1969) went on to postulate that
individuals who are overly optimistic in
their demands may actually end up with a lower payoff than
those whose initial demands are more
realistic.
These ideas
can be applied to student behavior. Students who are overly
optimistic with
regards to their grade expectations and set their goals
too high may become discouraged and put
forth less effort in a class. In this case, over-optimism
may result in a relatively worse course grade.
In addition, the search behavior described by Simon may
result in signaling on the part of poorer
students. Such activity may make it more difficult for
an instructor to award grades that accurately reflect
student knowledge and ability. Thus, overly optimistic grade
expectations on the part of
students can have implications for the grades ultimately awarded
in a course and can therefore have
implications for instructor response to this behavior.
Our paper
uses survey data collected on over 400 students enrolled
in principles of
economics courses at a Midwestern university in an attempt
to establish whether aspiration or
signaling theory can be applied to the aforementioned student
behavior. Such a determination is
important in that the underlying cause of overestimation
of grades has important implications for
both professor response to this student behavior and for
student performance in the course.
Estimation
of an ordered probit model indicates that student grade prediction
in these
principles courses is driven by both overly optimisic
aspirations and signaling. Thus, we conclude
that policies designed to bring student perceptions more
into line with reasonable performance
expectations should be coupled with efforts to provide
instructors with more information about
individual student ability. This will not only help to
maximize student performance in the course but
will also benefit instructors’ efforts to differentiate
between high-ability and low-ability students and prevent
the lowering of grading standards on the basis of false
signals.
Read
the Entire Paper...
TIP
OF THE WEEK
Marketing
Perspectives • The
primary customer base for 45 percent of small businesses
is the general public; the base for another 22 percent
is other businesses; and, for still another 2 percent it is
government and/or non-profits. However, for 30 percent, the
primary customer base is too varied for small employers to
identify one.
• Twelve (12) percent of small businesses sell to a small number
of business customers creating the potential of becoming
a captive supplier.
• Fifty-five
(55) percent of small employers think that their businesses do not need much
marketing since their products/services
pretty much sell themselves. Forty-two (42) percent disagree.
• A large share of the small-business population depends on repeat
customers. Twelve (12) percent of small-business owners
indicate virtually all customers are repeat customers while another
34 percent say most are repeat. Forty-five (45) percent
report their customer base is mixed between repeat and non-repeat customers. Repeat
customers are prized because they are easier to attract than developing new ones
(according to three in
four small employers) and are cheaper to retain than
to newly acquire (according to seven in 10 small employers).
• The distinction between marketing and selling is sharp for
virtually as many as the distinction is non-existent.
Twenty-eight (28) percent think the two concepts are the same thing while
29 percent think they are very different. Forty (40)
percent think marketing and selling are somewhat different.
•
Forty-eight (48) percent of small businesses have a separate
annual marketing budget within the firm’s overall
budget; 43 percent do not have a separate, annual
marketing budget.
• Experience and customer observation are substantially more
likely to influence small business owners marketing
decisions than formal, systematic approaches. For example, 83 percent
assert that they base most of their marketing decisions
on what they learn from day-to-day contact with customers. Seventy-four
(74) percent think it is important to rely on gut
feel when making marketing decisions. Their use of formal market research
is modest.
• Small-business owners advocate a long-term business outlook.
Eighty-five (85) percent argue that long-term
business growth is a higher priority than immediate profit. Ninety-seven (97)
percent say that they try to build long-term
relationships
with their customers.
• Seventy-eight (78) percent of small employers think that adding innovative
products/services in response to customer demand, though suppliers also stimulate
introduction.
• Small-business owners recognize that customers are critical
to their success. They also understand that
customers are becoming more difficult to satisfy and an abundance of competitors
are
ready to leap on their customers should they
falter. For example, 87 percent agree that customers require businesses to be
very
flexible and adapt to special customer requirements.
Eighty-three (83) percent think that they face tough competition in their
markets.
• More small employers intend their marketing efforts to lead
customers (61%) than to respond to them
(28%).
NFIB
National Small Business Poll: Marketing Perspectives.
By: William J. Dennis, Jr. Volume 6, Issue 8, 2006.
Published 2006.
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