Identity, Dignity and Taboos: Beliefs as Assets
We 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 behaviours 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.
|Date of creation:||Feb 2007|
|Date of revision:|
|Contact details of provider:|| Postal: Centre for Economic Policy Research, 77 Bastwick Street, London EC1V 3PZ.|
Phone: 44 - 20 - 7183 8801
Fax: 44 - 20 - 7183 8820
|Order Information:|| Email: |
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Wojciech Kopczuk & Joel Slemrod, 2005.
"Denial of Death and Economic Behavior,"
NBER Working Papers
11485, National Bureau of Economic Research, Inc.
- Smith, John, 2010.
"Reputation, social identity, and social conflict,"
23336, University Library of Munich, Germany.
- Ulrich Horst & Alan Kirman & Miriam Teschl, 2006.
"Changing Identity: The Emergence of Social Groups,"
- Rabin, Mathew, 1991.
"Cognitive Dissonance and Social Change,"
Department of Economics, Working Paper Series
qt37b169jt, Department of Economics, Institute for Business and Economic Research, UC Berkeley.
- Roland G. Fryer & Matthew O. Jackson, 2002.
"Categorical Cognition: A Psychological Model of Categories and Identification in Decision Making,"
- Jackson, Matthew O. & Fryer Jr., Roland G., 2002. "Categorical Cognition: A Psychological Model of Categories and Identification in Decision Making," Working Papers 1144, California Institute of Technology, Division of the Humanities and Social Sciences.
- Roland G. Fryer, Jr. & Matthew O. Jackson, 2003. "Categorical Cognition: A Psychological Model of Categories and Identification in Decision Making," NBER Working Papers 9579, National Bureau of Economic Research, Inc.
- Oxoby, Robert J., 2003. "Attitudes and allocations: status, cognitive dissonance, and the manipulation of attitudes," Journal of Economic Behavior & Organization, Elsevier, vol. 52(3), pages 365-385, November.
- Wichardt, Philipp C., 2007. "Why and How Identity Should Influence Utility," Discussion Paper Series of SFB/TR 15 Governance and the Efficiency of Economic Systems 193, Free University of Berlin, Humboldt University of Berlin, University of Bonn, University of Mannheim, University of Munich.
- Juan D. Carrillo & Thomas Mariotti, 2000. "Strategic Ignorance as a Self-Disciplining Device," Review of Economic Studies, Oxford University Press, vol. 67(3), pages 529-544.
When requesting a correction, please mention this item's handle: RePEc:cpr:ceprdp:6123. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ()
If references are entirely missing, you can add them using this form.