  We study peer-grading with competitive graders who enjoy a higher utility
when their peers get lower scores. We propose a new mechanism, PEQA, that
incentivizes such graders through a score-assignment rule which aggregates the
final score from multiple peer-evaluations, and a grading performance score
that rewards performance in the peer-grading exercise. PEQA makes grader-bias
irrelevant. Additionally, under PEQA, a peer-grader's utility increases
monotonically with the reliability of her grading, irrespective of her
competitiveness and how her co-graders act. In a reasonably general class of
score assignment rules, PEQA uniquely satisfies this utility- reliability
monotonicity. When grading is costly and costs are private information, a
modified version of PEQA implements the socially optimal effort choices in an
equilibrium of the peer-evaluation game. Data from our classroom experiments
confirm our theoretical assumptions and show that PEQA outperforms the popular
median mechanism.
