People are not as rational as economists would like to believe, but there are ways to nudge people into doing what’s best for them.
Early in my teaching career I managed to get most of the students in my class mad at me. A midterm exam caused the problem.
I wanted the exam to sort out the stars, the average Joes and the duds, so it had to be hard and have a wide dispersion of scores. I succeeded in writing such an exam, but when the students got their results they were in an uproar. Their principal complaint was that the average score was only 72 points out of 100.
What was odd about this reaction was that I had already explained that the average numerical score on the exam had absolutely no effect on the distribution of letter grades. We employed a curve in which the average grade was a B+, and only a tiny number of students received grades below a C. I told the class this, but it had no effect on the students’ mood. They still hated my exam, and they were none too happy with me either. As a young professor worried about keeping my job, I wasn’t sure what to do.