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Reputation, Social Identity and Social Conflict

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  • John Smith

    ()
    (Rutgers University-Camden)

Abstract

We interpret the psychology literature on social identity and examine its implications in a population partially composed of such agents. We model a population of agents from two exogenous and well defined social groups. Agents are randomly matched to play a reduced form bargaining game. We show that this struggle for resources drives a conflict through the rational destruction of surplus. We assume that the population contains both rational players and behavioral players. Behavioral players aggressively discriminate against members of the other social group. The existence and specification of the behavioral player is motivated by the social identity literature. For rational players, group membership has no payoff relevant consequences. We show that rational players can contribute to the conflict by aggressively discriminating and that this behavior is consistent with existing empirical evidence. Our paper relates to the empirical literature which finds that our measure of social heterogeneity tends to be increasing in economic variables which we interpret as signifying inefficiency. We provide an explanation that, as social groups compete for the benefits of public goods, disagreement and inefficiency can result. Our work also relates to the social conflict literature, which examines the relationship between macro level factors such as unemployment and civil disturbances. This literature finds that the amount of social conflict tends to be increasing in what we refer to as the inequitability of the environment.

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Bibliographic Info

Paper provided by Rutgers University, Department of Economics in its series Departmental Working Papers with number 200709.

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Length: 20 pages
Date of creation: 14 Oct 2007
Date of revision:
Handle: RePEc:rut:rutres:200709

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Keywords: reputation; conflict; identity;

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References

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  1. Alesina, Alberto & Baqir, Reza & Easterly, William, 1999. "Public goods and ethnic divisions," Policy Research Working Paper Series 2108, The World Bank.
  2. Erik Lindqvist & Robert Östling, 2013. "Identity and redistribution," Public Choice, Springer, vol. 155(3), pages 469-491, June.
  3. Holger Strulik, 2008. "Social composition, social conflict and economic development," Economic Journal, Royal Economic Society, vol. 118(530), pages 1145-1170, 07.
  4. Hillel Rapoport & Avi Weiss, 2001. "The Optimal Size for a Minority," Working Papers 2001-01, Department of Economics, Bar-Ilan University.
  5. Easterly, William & Levine, Ross, 1997. "Africa's Growth Tragedy: Policies and Ethnic Divisions," The Quarterly Journal of Economics, MIT Press, vol. 112(4), pages 1203-50, November.
  6. Gary Charness & Luca Rigotti & Aldo Rustichini, 2007. "Individual Behavior and Group Membership," American Economic Review, American Economic Association, vol. 97(4), pages 1340-1352, September.
  7. Bridgman, Benjamin, 2008. "Why are ethnically divided countries poor?," Journal of Macroeconomics, Elsevier, vol. 30(1), pages 1-18, March.
  8. Güth, Werner & Levati, M. Vittoria & Ploner, Matteo, 2008. "Social identity and trust--An experimental investigation," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 37(4), pages 1293-1308, August.
  9. Basu, Kaushik, 2005. "Racial Conflict and the Malignancy of Identity," Working Papers 05-02, Cornell University, Center for Analytic Economics.
  10. John B. Davis, 2005. "Social Identity Strategies in Recent Economics," Tinbergen Institute Discussion Papers 05-078/2, Tinbergen Institute.
  11. Mauro, Paolo, 1995. "Corruption and Growth," The Quarterly Journal of Economics, MIT Press, vol. 110(3), pages 681-712, August.
  12. Rohner, Dominic, 2011. "Reputation, group structure and social tensions," Journal of Development Economics, Elsevier, vol. 96(2), pages 188-199, November.
  13. Lorenz Goette & David Huffman & Stephan Meier, 2006. "The impact of group membership on cooperation and norm enforcement: evidence using random assignment to real social groups," Working Papers 06-7, Federal Reserve Bank of Boston.
  14. Esteban, Joan & Ray, Debraj, 1999. "Conflict and Distribution," Journal of Economic Theory, Elsevier, vol. 87(2), pages 379-415, August.
  15. Lindqvist, Erik, 2008. "Identity and Redistribution," Working Paper Series 735, Research Institute of Industrial Economics.
  16. David Kreps & Robert Wilson, 1999. "Reputation and Imperfect Information," Levine's Working Paper Archive 238, David K. Levine.
  17. Dan Silverman, 2004. "Street Crime And Street Culture," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 45(3), pages 761-786, 08.
  18. John B Davis, 2005. "Social Identity Strategies in Recent Economics," Working Papers and Research 0508, Marquette University, Center for Global and Economic Studies and Department of Economics.
  19. George A. Akerlof & Rachel E. Kranton, 2000. "Economics And Identity," The Quarterly Journal of Economics, MIT Press, vol. 115(3), pages 715-753, August.
  20. Vigdor, Jacob L., 2002. "Interpreting ethnic fragmentation effects," Economics Letters, Elsevier, vol. 75(2), pages 271-276, April.
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Cited by:
  1. Benabou, Roland & Tirole, Jean, 2007. "Identity, Dignity and Taboos: Beliefs as Assets," IZA Discussion Papers 2583, Institute for the Study of Labor (IZA).
  2. Afridi, Farzana & Li, Sherry Xin & Ren, Yufei, 2012. "Social Identity and Inequality: The Impact of China's Hukou System," IZA Discussion Papers 6417, Institute for the Study of Labor (IZA).
  3. David W. Johnston & Grace Lordan, 2014. "When Work Disappears: Racial Prejudice and Recession Labour Market Penalties," CEP Discussion Papers dp1257, Centre for Economic Performance, LSE.
  4. Wagener, Andreas & Kolmar, Martin, 2011. "Group Identities in Conflicts," Annual Conference 2011 (Frankfurt, Main): The Order of the World Economy - Lessons from the Crisis 48694, Verein für Socialpolitik / German Economic Association.

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