Does Easier Test Reduce Efforts?

다국어 초록 (Multilingual Abstract)

This paper investigates whether an easier test in relative evaluation reduces student's efforts to outperform. Each student competes against the field for the pre-determined number of winning prizes where his/her test score depends on three components, basic ability, efforts and luck. In equilibrium, those with marginal ability put forth efforts most. They are marginal in the sense that their ranking in ability distribution is close to the pre-set number of winners. Easiness of a test is modeled as placing abler individuals at a relative disadvantage in test score as an easy question can be answered with a few efforts even by less able individuals or does not require high ability to answer. In relative evaluation where ranking matters, an easier test tends to induce greater efforts among most individuals. This is a result exactly opposite to the common belief that wastefully excessive efforts and expenditure put forth, for example, by the Korean students preparing for the national college entrance exams are attributable to the difficulty of the exams. Further, such test reduces "screening" efficacy, which potentially deteriorates social efficiency in resource allocation.