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Us and `Them': the origin of identity, and its economic implications

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  • B. Curtis Eaton
  • Mukesh Eswaran
  • Robert J. Oxoby

Abstract

We investigate the origins of identity and the innate proclivity to draw a distinction between `insiders' and `outsiders'. We propose an evolutionary explanation: we argue that identity arises because it facilitates survival. In an evolutionary setting we endogenize preferences and demonstrate that the evolutionarily stable preferences fashioned by natural selection would distinguish between insiders and outsiders. We then work out the implications of such preferences in two contemporary scenarios, one entailing rent-seeking behaviour and the other involving public good provision. Our results are in conformity with empirical evidence.

Suggested Citation

  • B. Curtis Eaton & Mukesh Eswaran & Robert J. Oxoby, 2011. "Us and `Them': the origin of identity, and its economic implications," Canadian Journal of Economics, Canadian Economics Association, vol. 44(3), pages 719-748, August.
  • Handle: RePEc:cje:issued:v:44:y:2011:i:3:p:719-748
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    References listed on IDEAS

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    Cited by:

    1. Bisin, Alberto & Patacchini, Eleonora & Verdier, Thierry & Zenou, Yves, 2016. "Bend it like Beckham: Ethnic identity and integration," European Economic Review, Elsevier, vol. 90(C), pages 146-164.
    2. Changxia Ke & Kai A. Konrad & Florian Morath, 2015. "Alliances In The Shadow Of Conflict," Economic Inquiry, Western Economic Association International, vol. 53(2), pages 854-871, April.
    3. Kenneth Harttgen & Matthias Opfinger, 2014. "National Identity and Religious Diversity," Kyklos, Wiley Blackwell, vol. 67(3), pages 346-367, August.
    4. Bicskei, Marianna & Lankau, Matthias & Bizer, Kilian, 2014. "Social environment and forms of governance: Monetary and non-monetary punishment and the role of emotions," Center for European, Governance and Economic Development Research Discussion Papers 202, University of Goettingen, Department of Economics.
    5. Kai A. Konrad & Florian Morath, 2016. "Evolutionary determinants of war," Defence and Peace Economics, Taylor & Francis Journals, pages 520-534.
    6. Kai A. Konrad & Florian Morath, 2011. "Evolutionarily stable in-group favoritism and out-group spite in intergroup conflict," Working Papers evolutionarily_stable, Max Planck Institute for Tax Law and Public Finance.
    7. Ingela Alger, 2010. "Public Goods Games, Altruism, and Evolution," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 12(4), pages 789-813, August.
    8. Herbst, Luisa & Konrad, Kai A. & Morath, Florian, 2015. "Endogenous group formation in experimental contests," European Economic Review, Elsevier, vol. 74(C), pages 163-189.
    9. Roman M. Sheremeta, 2015. "Behavior in Group Contests: A Review of Experimental Research," Working Papers 15-21, Chapman University, Economic Science Institute.
    10. Bolle, Friedel & Costard, Jano, 2013. "Who shows solidarity with the irresponsible?," Discussion Papers, Research Unit: Economics of Change SP II 2013-308, Social Science Research Center Berlin (WZB).
    11. Roy Chen & Yan Chen, 2011. "The Potential of Social Identity for Equilibrium Selection," American Economic Review, American Economic Association, vol. 101(6), pages 2562-2589, October.
    12. Konrad, Kai A. & Morath, Florian, 2016. "Bargaining with incomplete information: Evolutionary stability in finite populations," Journal of Mathematical Economics, Elsevier, vol. 65(C), pages 118-131.
    13. Bicskei, Marianna & Lankau, Matthias & Bizer, Kilian, 2014. "How peer-punishment affects cooperativeness in homogeneous and heterogeneous groups: A public goods experiment with social identity," Center for European, Governance and Economic Development Research Discussion Papers 200, University of Goettingen, Department of Economics.
    14. Costard, Jano & Bolle, Friedel, 2011. "Solidarity, responsibility and group identity," Discussion Papers 309, European University Viadrina Frankfurt (Oder), Department of Business Administration and Economics.
    15. Alberto Bisin & Thierry Verdier, 2010. "The Economics of Cultural Transmission and Socialization," Post-Print halshs-00754788, HAL.
    16. Bicskei, Marianna & Lankau, Matthias & Bizer, Kilian, 2014. "Negative reciprocity and its relation to anger-like emotions in homogeneous and heterogeneous groups," Center for European, Governance and Economic Development Research Discussion Papers 203, University of Goettingen, Department of Economics.
    17. Benny Geys & Kai A. Konrad, 2016. "Patriotism and Taxation," Working Papers tax-mpg-rps-2016-11, Max Planck Institute for Tax Law and Public Finance.
    18. Bicskei, Marianna & Lankau, Matthias & Bizer, Kilian, 2016. "Negative reciprocity and its relation to anger-like emotions in identity-homogeneous and -heterogeneous groups," Journal of Economic Psychology, Elsevier, vol. 54(C), pages 17-34.

    More about this item

    JEL classification:

    • D03 - Microeconomics - - General - - - Behavioral Microeconomics: Underlying Principles
    • D87 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Neuroeconomics
    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • H00 - Public Economics - - General - - - General

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