It all started when Jeremy Gelbart, one of the founders of Ultrinsic, made a bet with Steven Wolf, the other founder, that he would make an A in a college class. After they graduated, they decided to see if this scheme could work on a larger scale:

Ultrinsic, currently in beta form, allows students at 37 colleges to gamble on their grades in each of the classes they take. The student hands over money to Ultrinsic--as well as access to his or her official school records--as a wager that they will attain a certain grade. If they get it, Ultrinsic pays out on a sliding scale.

A pilot scheme in place at both Penn and NYU over the last academic year had some takers, including one guy who won $150, although the serious money is to be made by high schoolers as they head off to university. Then, if you bet $20 on getting a 4.0 GPA, then you'll walk away with $2,000 should you succeed. That, apparently, is what motivation looks like.

Link via Marginal Revolution | Photo by Flickr user banspy used under Creative Commons license