Why and How Identity Should Influence Utility

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Why and How Identity Should Influence Utility

Author Info

Philipp C. Wichardt (Economic Theory 3, University of Bonn, Adenauerallee 24-26, D-53113 Bonn, Germany. philipp.wichardt@uni-bonn.de.)

Abstract

This paper provides an argument for the advantage of a preference for identity-consistent behaviour from an evolutionary point of view. Within a stylised model of social interaction, we show that the development of cooperative social norms is greatly facilitated if the agents of the society possess a preference for identity consistent behaviour. As cooperative norms have a positive impact on aggregate outcomes, we conclude that such preferences are evolutionarily advantageous. Furthermore, we discuss how such a preference can be integrated in the modelling of utility in order to account for the distinctive cooperative trait in human behaviour and show how this squares with the evidence.

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Publisher Info
Paper provided by SFB/TR 15 Governance and the Efficiency of Economic Systems, Free University of Berlin, Humboldt University of Berlin, University of Bonn, University of Mannheim, University of Munich in its series Discussion Papers with number 193.

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Date of creation: Jan 2007
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Handle: RePEc:trf:wpaper:193

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Find related papers by JEL classification:
A13 - General Economics and Teaching - - General Economics - - - Relation of Economics to Social Values
C70 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - General
C90 - Mathematical and Quantitative Methods - - Design of Experiments - - - General
D01 - Microeconomics - - General - - - Microeconomic Behavior: Underlying Principles
Z13 - Other Special Topics - - Cultural Economics - - - Social Norms and Social Capital; Social Networks Economic Anthropology

This paper has been announced in the following NEP Reports:

NEP-ALL-2007-03-03 (All new papers)
NEP-CBE-2007-03-03 (Cognitive & Behavioural Economics)
NEP-EVO-2007-03-03 (Evolutionary Economics)
NEP-SOC-2007-03-03 (Social Norms & Social Capital)
NEP-UPT-2007-03-03 (Utility Models & Prospect Theory)

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