Identity, Dignity and Taboos: Beliefs as Assets
AbstractWe analyze social and economic phenomena involving beliefs which people value and invest in, for affective or functional reasons. Individuals are at times uncertain about their own deep values and infer them from their past choices, which then come to define who they are. Identity investments increase when information is scarce or when a greater endowment of some asset (wealth, career, family, culture) raises the stakes on viewing it as valuable (escalating commitments). Taboos against transactions or the mere contemplation of tradeoffs arise to protect fragile beliefs about the priceless value of certain assets (life, freedom, love, faith) or things one would never do. Whether such behaviors are welfare-enhancing or reducing depends on whether beliefs are sought for a functional value (sense of direction, self-discipline) or for mental consumption motives (self-esteem, anticipatory feelings). Escalating commitments can thus lead to a hedonic treadmill, and competing identities cause dysfunctional failures to invest in high-return activities (education, adapting to globalization, assimilation), or even the destruction of productive assets. In social interactions, norm violations elicit a forceful response (exclusion, harassment) when they threaten a strongly held identity, but further erode morale when it was initially weak. Concerns for pride, dignity or wishful thinking lead to the inefficient breakdown of Coasian bargaining even under symmetric information, as partners seek to self-enhance and shift blame by turning down insultingly low offers.
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Bibliographic InfoPaper provided by Collegio Carlo Alberto in its series Carlo Alberto Notebooks with number 50.
Length: 43 pages
Date of creation: 2007
Date of revision:
identity; self-serving beliefs; self-image; memory; wishful thinking; anticipatory utility; self control; hedonic treadmill; inefficient bargaining; taboos; religion.;
Other versions of this item:
- Benabou, Roland & Tirole, Jean, 2007. "Identity, Dignity and Taboos: Beliefs as Assets," IZA Discussion Papers 2583, Institute for the Study of Labor (IZA).
- Bénabou, Roland & Tirole, Jean, 2007. "Identity, Dignity and Taboos: Beliefs as Assets," CEPR Discussion Papers 6123, C.E.P.R. Discussion Papers.
- D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
- D91 - Microeconomics - - Intertemporal Choice - - - Intertemporal Household Choice; Life Cycle Models and Saving
- Z13 - Other Special Topics - - Cultural Economics - - - Economic Sociology; Economic Anthropology; Social and Economic Stratification
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