Abstract I present a model in which relative standing determines the level of achievement needed to pass a test. I argue that standards are likely to decline under such a system. There are three kinds of agents in the model.
Candidates wish to pass a test, obtain a promotion, or gain a credential.
Members of the elite are people who have already passed the test. The judge decides who passes. In order to pass, a candidate's performance must be at least as good as the performance of a representative member of the elite. Candidates choose the least expensive effort level that will enable them to pass. Perturbations in the preferences used to judge candidates systematically lead to a reduction in standards.