That depends on the reward function. Should society reward credentials or skill?

Ideally a mix of skill and will.

Earned credentials are a marker that you once demonstrated some sufficient combination of both.

Society rewards credentials and skill. So both are but one is easier to get with cheating.

"Should" is one thing, reality is another

Students aren’t optimizing for what is best for society. They are optimizing for themselves, which almost always means getting a job.

The credential is a prerequisite but skills are a differentiator. Problem is, not all skills are equal.

Amazon isn’t going to ask you about your opinions on The Illiad, they are going to check if you can write an efficient algorithm to rob houses or merge sorted linked lists.

The system design questions are (at least):

1. What is this education intended to optimise for?

2. What are the various participants (including students) optimising for?

3. What aligns 1 and 2?

The fundamental issue is that for almost all students, college is really job training in academic clothing. Universities will never admit this, and some professors delude themselves into believing it’s not true. But it’s the only explanation for why students would take enormous loans rather than simply get jobs.

But why else would you have a bunch of students join a class and cheat? Something like 22 out of the 27 perfect midterm students didn’t show up to the final? Obviously these people are not in it for the joy of learning.

So the answers to your questions are 1) learning 2) job-worthiness 3) measurements of 1 which accurately and plausibly reflect 2.

If a course does not plausibly reflect job readiness, or students’ grades do not reflect competence in the subject then the course must be fixed.

> They are optimizing for themselves, which almost always means getting a job.

Instead they should optimize for keeping a job.

Since you mention Amazon, I work there as a senior software engineer (almost 10 years of tenure) and the quality of interns has massively degraded since LLMs are available. The result is that where the majority of interns used to receive return offers, now the vast majority doesn't.

Similarly, a lot of new grads get kicked out quickly, before the end of the trial period, because they suck. A lot more than in the past.

That is funny, because job hopping has been the recommended advice on this forum for 2 decades, especially job hopping away from Amazon to greener pastures.

Leaving a company in less than 6 months is not regarded as job hopping by anyone.

Game Theory seems sort of useless in the real world because people are not rational players, and the real challenge is in getting an accurate model of their behavior. The honor system would work probably fine in a tiny close-knit liberal arts college, while it would obviously wouldn't in a place where the degree itself is the target.

Game theory seemed kind of useful when the US was negotiating nuclear weapons control with the Soviets. It allowed successful negotiations in an extremely low trust situation.

Also, your own example is an application of game theory; you've basically stated a 'prisoner's dilemma' problem. You state that in a high trust society, most people will choose cooperation, while in a low trust society, most people will defect.

Aside from evolutionary biology, cancer research, embryonic development, economics, internet routing, spectrum auctions, counter-terrorism, kidney exchanges, generative AI, and preventing nuclear apocalypse...What HAS game theory done for us?!

Proved that everyone asking that question is playing a signalling game!

when you know what is game theoretic, deviation from it carries information you can potentially exploit.

Everything in life is game theory

Another irony from TFA:

"We economists understand reality as a set of people responding to optimization problems with restrictions."

I think you're missing the fact that everyone knows. He just got reliable data from a natural experiment, which makes the chancellor can't just look away any longer.

People for sure have always cheated in these take home exams. This has to have been to protect rich kids with parents who give money to the university. It's insane to learn how many fancy universities have garbage blatantly unmeritocratic evaluation systems like this

That is true, and it was always a bad idea. But hey, economics. If economists should be aware of anything, it's that university financing in large parts of the world have perverse incentives.