I don't agree with your 3rd option, I think it encourages the incorrect notion that social status == happiness.
Second grade was kind of weird.
Anyhow, I have to say that as weird as I see it in retrospect, it worked pretty well for me. I didn't super enjoy maintaining my relationship with the other boy, but I liked it a lot more than being a low status person others picked on.
I make no grand claims to universality.