For a project in experimental economics, I thought of doing something related to expected utility theory/prospect theory, but using grades instead of money.
Is this reformulation of the Allais paradox conceptually right or not?
Consider the following scenario:
A.1 – you can get an B+ with probability 100%
B.1 – you can get A with probability 10% or get B+ with probability 89% or not passing the exam with probability 1%.
A.2 – you can get B+ with probability 11% or not passing the exam with probability 89%,
B.2 – you can get A with probability 10% or not pass the exam with probability 90%.*
Then I will modify the problem to see if for higher stakes student's preferences change.
Edit: If we consider that not passing the exam gives utility = 0, (as in the Allais paradox we have the same case because it corresponds to receiving 0$) the graph of the utility function, assuming constant marginal utility of grades would look like this: