But, by assigning a grade A to scores above 85, B to scores between 50 and 85, and C to below 50, the professor can inspire Dumbo to work, for then Dumbo stands a chance to acquire the same status B as Brainy, even when Brainy is working. This in turn generates the competition which in fact spurs Brainy to work, so that with luck he can distinguish himself from Dumbo. He doesn't want to be mislabelled. With finer grading everyone gets their own label so this effect disappears.

　　The corollary to this in my example is that if the brainy student knows that even when slacking off he will still do measurably better than most students he may decide that he can still get a very good job with 70 to 80. There may be students who score 80 to 90 with superior credentials but academic performance is only part of the hiring criteria. If he can signal himself as a brainy student he might think this is enough.

　　However, critical to all this is that all exams are taken together, as they are at Oxford or Cambridge universities, usually at the end of the degree in a consecutive-day marathon. The trend in other British universities has been to examine various courses throughout the degree. The result is that those in the middle of the ability range can work very hard at the beginning, bank a 2.1 and then slack off in the remaining years. It is partly for this reason that those universities pushing hardest for the changes have exams split across years. Oxford and Cambridge are less keen.