This paper examines the effects of framing a bonus question on an exam as a potential gain or loss in an undergraduate economics course. The objectives of this research are to investigate whether students are more likely to exert effort if the instructor frames success as gaining points or as avoiding losing points and to investigate whether there is any difference between how females and males respond in each treatment. To investigate the effects we gave 106 students who were taking Macroeconomics at the University of Applied Sciences in Mainz a bonus question. Roughly half of the students were told that they can get up to 10 additional bonus points by successfully answering the bonus question while the other half were told they have 10 bonus points, but they would lose them if they do not answer the question successfully. Using a Fisher’s Exact Test, we find that females are more likely to succeed when success is defined as gaining points, while males are more likely to succeed when success is defined as avoiding a loss. In a consequent experiment, we also find that males are more likely than females to gamble the bonus points that they earned.
Our paper is one of the first to examine the validity of prospect theory in an educational setting and is the first to look the effects of framing a test question as a prospective gain or a prospective loss. The paper has important policy implications both within and outside the classroom. This research provides insight for educators on how to motivate students to exert more effort. It also provides insight for educators on how to motivate students to exert more effort. It also provides insight on how to create incentives for males and females and to market ideas or products for each group. We plan to extend this research by directly examining students' effort by measuring the minutes spent working on a problem and also by correlating the students' behavior to their grade in the class and to their overall Grade Point Average.