You forgot 7) - that basically there's no outside incentive. People do it for themselves. It's not like they're going to recoup the money spent on training/exams in increased pay beyond L2 or even that.
The incentives depend on the resort. I know it's less common, but my snow school reimburses fees for courses and passed (not failed) exams. And even without reimbursement, the pay raise (typically an additional $1-2/hour at Canadian resorts) means you do make back your investment within one full-time season.
Still, the rarity of incentives doesn't really dissuade a high rate of exam-attempts, at least not here in BC.
With a pass rate of 5 to 10 percent, are these "cocky instructors" advised that they needn't bother taking the exam, but take it despite the advice?
This is a gray area and perhaps the only real criticism I have for some (not all) CSIA trainers. It being a customer-oriented industry, there's sometimes a tendency to be "nice" and not give candidates the plain, unvarnished truth. Instead, the standard refrain is "Fix x, y, and z and you'd be very close."
But now that I'm a trainer (but only an L1 examiner), I see things from the other side and find myself using the same line. There are a few problems with giving candidates a straight up "you're ready / not ready" verdict.
1) Their every day skiing often doesn't correlate to exam-day skiing. Unfortunately, instructors often have the same recreational mindset as their target customers, thus their performance psychology is lacking. They don't have the mental toughness that racers take years develop, therefore choke when it's show time. Conversely, a candidate who wasn't ready a couple of weeks before exam day might make a break through in intensive training in the final days leading up to it.
2) Telling a candidate that they're ready can lead to them slacking off in training.
3) Telling a candidate that they're NOT ready might have little effect because they don't really understand the specific reasons why they're not ready, even when they receive detailed feedback. As we saw with the
extensive discussion regarding Wedge Christie's, it can take many, many iterations of training and examination for someone to truly get something as "simple" as the whys and hows of flattening the inside ski.
And finally, yes, many cocky candidates (usually the 16-25 year olds) ignore advice not to take the exam, perhaps because they underestimate how difficult it can be to change deeply-ingrained movement patterns or learn new ones. There's plenty of FIGJAM-bros around and we've all been guilty at one time or another of being one. I certainly was, in the beginning, and being humbled through failure was a good thing.