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Categorical Cognition: A Psychological Model of Categories and Identification in Decision Making

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Author Info

  • Roland G. Fryer

    (University of Chicago)

  • Matthew O. Jackson

    (California Institute of Technology)

Abstract

This paper introduces a psychological notion of categorization into economics and derives its implications for economic decision making. We show, using a tractable model of social cognition, that a decision maker in (efficiently) assigning past experiences to categories, will sort experiences of interaction with larger (majority) groups more finely than experiences with smaller (minority) groups. We then apply the model to understand simple forms of discrimination and social identity. It is shown that discrimination in hiring can result from such cognitive processes even when there is no malevolent taste to do so and workers' qualifications are fully observable. The model also provides a framework that is equipped to investigate the social psychological

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Bibliographic Info

Paper provided by EconWPA in its series Microeconomics with number 0211002.

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Date of creation: 04 Nov 2002
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Handle: RePEc:wpa:wuwpmi:0211002

Note: Type of Document - pdf. preliminary version - comments welcome
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Web page: http://128.118.178.162

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Keywords: categorization; discrimination; bounded rationality;

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  1. Roland G. Fryer, Jr. & Steven D. Levitt, 2002. "Understanding the Black-White Test Score Gap in the First Two Years of School," NBER Working Papers 8975, National Bureau of Economic Research, Inc.
  2. Jehiel, Philippe, 2005. "Analogy-based expectation equilibrium," Journal of Economic Theory, Elsevier, vol. 123(2), pages 81-104, August.
  3. Matthew Jackson & Ehud Kalai, 1995. "Social Learning in Recurring Games," Discussion Papers 1138, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
  4. Phelps, Edmund S, 1972. "The Statistical Theory of Racism and Sexism," American Economic Review, American Economic Association, vol. 62(4), pages 659-61, September.
  5. Moro,A. & Norman,P., 2001. "A general equilibrium model of statistical discrimination," Working papers 4, Wisconsin Madison - Social Systems.
  6. Barberis, Nicholas & Shleifer, Andrei, 2003. "Style investing," Journal of Financial Economics, Elsevier, vol. 68(2), pages 161-199, May.
  7. Phipps Arabie, 1991. "Was euclid an unnecessarily sophisticated psychologist?," Psychometrika, Springer, vol. 56(4), pages 567-587, December.
  8. repec:fth:harver:1908 is not listed on IDEAS
  9. George A. Akerlof & Rachel E. Kranton, 2000. "Economics And Identity," The Quarterly Journal of Economics, MIT Press, vol. 115(3), pages 715-753, August.
  10. Kim-Sau Chung, 2000. "Role Models and Arguments for Affirmative Action," American Economic Review, American Economic Association, vol. 90(3), pages 640-648, June.
  11. Hanming Fang, 2001. "Social Culture and Economic Performance," American Economic Review, American Economic Association, vol. 91(4), pages 924-937, September.
  12. Joel L. Schrag, 1999. "First Impressions Matter: A Model Of Confirmatory Bias," The Quarterly Journal of Economics, MIT Press, vol. 114(1), pages 37-82, February.
  13. Cornell, Bradford & Welch, Ivo, 1996. "Culture, Information, and Screening Discrimination," Journal of Political Economy, University of Chicago Press, vol. 104(3), pages 542-71, June.
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