When grading exams, teachers typically award a number of points to each answer given, up to a certain predetermined maximum number of points for every question on the exam. The grade for the exam is a function of the total number of points scored. This function is called the norm of the exam. Often, teachers adjust this norm depending on how well (or how poorly) students performed. As a teacher you typically want 60-70% of the students to pass your exam.
With the current Covid-19 pandemic, exams are increasingly held remotely. This increases the opportunities for fraud: students may call each other, secretly share answers using shared documents, or use inadmissible tools like certain calculators or software, etc.
This creates a kind of prisoner's dilemma for students that do not want to cheat, but know that their fellow students could easily do so. If many students cheat, the overall exam results will be pretty good. This may lead to an adjustment of the norm. The norm may be made more strict, meaning that you need more points to pass the exam. This puts people that didn't cheat at a disadvantage: they are likely to score fewer points than those that did. So even if you are inclined not to cheat, knowing that your fellow students might cheat creates a strong incentive to cheat as well (especially if the topic of the exam is not one you excel at).
Can this dilemma be defused? Certainly. As a teacher you should publicly commit to a norm well before the start of your exam. And if you decide to deviate from the norm, only do so to adjust for a poorly made exam by lowering the norm. This way, honest students are certain they will never be adversely affected by fellow students that decide to cheat.
To me, the real craziness is with this idea of “a norm” – that the number of points required to pass are based on how other students perform. Never in my (admittedly brief but developping) teaching career have I understood how something like this makes any sense. I understand that students’ results can provide feedback to the teacher, to adjust both the methods of teaching and of examination, but why should a students grade depend on how well others did?