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Value Formation: The Role of Esteem

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  • Akerlof, Robert

Abstract

People's values are a critical determinant of their behavior. But, how do values form and what causes them to change? This paper proposes a theory of value formation. In the model, agents choose values, motivated by economic considerations and, crucially, also by the desire for esteem. The comparative statics are driven by the following tension: agents obtain more esteem from peers if they conform in their choice of values; but they may obtain more self-esteem if they differentiate. This tension explains why, for instance, peer effects are sometimes positive and sometimes negative. Three applications are considered, related to: schools, inner cities, and organizational resistance.

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  • Akerlof, Robert, 2017. "Value Formation: The Role of Esteem," Games and Economic Behavior, Elsevier, vol. 102(C), pages 1-19.
    • Handle: RePEc:eee:gamebe:v:102:y:2017:i:c:p:1-19
    DOI: 10.1016/j.geb.2016.10.011
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    Cited by:

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    2. Akerlof, Robert & Rayo, Luis, 2020. "Narratives and the Economics of the Family," CEPR Discussion Papers 15152, C.E.P.R. Discussion Papers.
    3. Akerlof, Robert & Rayo, Luis, 2020. "Narratives and the Economics of the Family," The Warwick Economics Research Paper Series (TWERPS) 1299, University of Warwick, Department of Economics.
    4. Steven J. Bosworth & Dennis J. Snower, 2019. "The Interplay of Economic, Social and Political Fragmentation," CESifo Working Paper Series 7935, CESifo.
    5. Gordon B Dahl & Christina Felfe & Paul Frijters & Helmut Rainer, 2022. "Caught between Cultures: Unintended Consequences of Improving Opportunity for Immigrant Girls [Economics and Identity]," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 89(5), pages 2491-2528.
    6. Jiabin Wu, 2021. "Stochastic Value Formation," Dynamic Games and Applications, Springer, vol. 11(3), pages 597-611, September.
    7. Avner Seror & Rohit Ticku, 2021. "Legalized Same-Sex Marriage and Coming Out in America: Evidence from Catholic Seminaries," Working Papers 21-07, Chapman University, Economic Science Institute.
    8. Florian Hett & Markus Kröll & Mario Mechtel, 2019. "Choosing Who You Are: The Structure and Behavioral Effects of Revealed Identification Preferences," Working Papers 1903, Gutenberg School of Management and Economics, Johannes Gutenberg-Universität Mainz.
    9. Dimant, Eugen, 2015. "On Peer Effects: Behavioral Contagion of (Un)Ethical Behavior and the Role of Social Identity," MPRA Paper 68732, University Library of Munich, Germany.
    10. Roth, Christopher & Hager, Anselm & , & Stegmann, Andreas, 2021. "Voice and Political Engagement: Evidence From a Natural Field Experiment," CEPR Discussion Papers 16839, C.E.P.R. Discussion Papers.
    11. Grote, Nora & Klausmann, Tim & Scharfbillig, Mario, 2023. "Investment in identity in the field-Nudging refugees’ integration effort," European Journal of Political Economy, Elsevier, vol. 78(C).
    12. Anay Mehrotra & Bary S. R. Pradelski & Nisheeth K. Vishnoi, 2022. "Selection in the Presence of Implicit Bias: The Advantage of Intersectional Constraints," Papers 2202.01661, arXiv.org, revised Jun 2022.
    13. Kanzola, Anna-Maria & Papaioannou, Konstantina & Petrakis, Panagiotis E., 2023. "Environmental behavioral perceptions under uncertainty of alternative economic futures," Technological Forecasting and Social Change, Elsevier, vol. 190(C).
    14. Carvalho, Jean-Paul & Pradelski, Bary SR, 2022. "Identity and underrepresentation: Interactions between race and gender," Journal of Public Economics, Elsevier, vol. 216(C).
    15. Mattauch, Linus & Hepburn, Cameron & Spuler, Fiona & Stern, Nicholas, 2022. "The economics of climate change with endogenous preferences," Resource and Energy Economics, Elsevier, vol. 69(C).
    16. Anay Mehrota & Bary S. R. Pradelski & Nisheeth K. Vishnoi, 2022. "Selection in the Presence of Implicit Bias: The Advantage of Intersectional Constraints," Cowles Foundation Discussion Papers 2335, Cowles Foundation for Research in Economics, Yale University.
    17. Fuhai Hong & Larry Karp & Tat-How Teh, 2021. "Identity in public goods contribution," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 57(3), pages 617-664, October.
    18. Jean-Paul Carvalho & Mark Koyama & Michael Sacks, 2017. "Education, identity, and community: lessons from Jewish emancipation," Public Choice, Springer, vol. 171(1), pages 119-143, April.
    19. H Peyton Young & Sam Jindani, 2020. "The dynamics of costly social norms," Economics Series Working Papers 883, University of Oxford, Department of Economics.
    20. Snower, Dennis J. & Bosworth, Steven J., 2021. "Economic, social and political fragmentation: Linking knowledge-biased growth, identity, populism and protectionism," European Journal of Political Economy, Elsevier, vol. 67(C).
    21. ,, 2019. "The Interplay of Economic, Social and Political Fragmentation," CEPR Discussion Papers 14111, C.E.P.R. Discussion Papers.
    22. Akerlof, Robert & Rayo, Luis, 2020. "Narratives and the Economics of the Family," CAGE Online Working Paper Series 503, Competitive Advantage in the Global Economy (CAGE).
    23. te Velde, Vera L., 2022. "Heterogeneous norms: Social image and social pressure when people disagree," Journal of Economic Behavior & Organization, Elsevier, vol. 194(C), pages 319-340.
    24. Nora Grote & Tim Klausmann & Mario Scharfbillig, 2019. "Investment in Identity in the Field - Nudging Refugees' Integration Effort," Working Papers 1905, Gutenberg School of Management and Economics, Johannes Gutenberg-Universität Mainz, revised 24 Sep 2021.

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    More about this item

    Keywords

    Identity; Culture; Values; Organizational resistance;
    All these keywords.

    JEL classification:

    • Z10 - Other Special Topics - - Cultural Economics - - - General
    • J01 - Labor and Demographic Economics - - General - - - Labor Economics: General

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