This perfect world is where the mythical “Econ” lives as well. Nobel prize-winning Richard Thaler famously points out that many economic models assume people are rational, unemotional, and self-controlled. And is quoted as saying “I believe that for the last 50 or 60 years, economists have devoted themselves to studying fictional creatures. They might as well be studying unicorns.”

What he means is that in a perfect world we all behave perfectly rationally but we don’t live in a perfect world.

I think your theory makes sense. We shouldn’t have to treat grades like a currency- rationally it makes little sense to do so. But, humans are hardwired to seek out reward and avoid loss. If there is no market, they will create one- as they have done here with grades.

This is a great thought piece, thank you!