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Identity, Dignity and Taboos: Beliefs as Assets

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  • Bénabou, Roland
  • Tirole, Jean

Abstract

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.

Suggested Citation

  • Bénabou, Roland & Tirole, Jean, 2007. "Identity, Dignity and Taboos: Beliefs as Assets," CEPR Discussion Papers 6123, C.E.P.R. Discussion Papers.
  • Handle: RePEc:cpr:ceprdp:6123
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    References listed on IDEAS

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    2. Bertrand, Marianne, 2011. "New Perspectives on Gender," Handbook of Labor Economics, Elsevier.
    3. David B. Audretsch & Erik E. Lehmann, 2013. "Corporate governance in newly listed companies," Chapters,in: Handbook of Research on IPOs, chapter 9, pages 179-206 Edward Elgar Publishing.
    4. Guido Tabellini, 2008. "The Scope of Cooperation: Values and Incentives," The Quarterly Journal of Economics, Oxford University Press, vol. 123(3), pages 905-950.
    5. Brousseau, Eric & Garrouste, Pierre & Raynaud, Emmanuel, 2011. "Institutional changes: Alternative theories and consequences for institutional design," Journal of Economic Behavior & Organization, Elsevier, vol. 79(1-2), pages 3-19, June.
    6. Afridi, Farzana & Li, Sherry Xin & Ren, Yufei, 2015. "Social identity and inequality: The impact of China's hukou system," Journal of Public Economics, Elsevier, vol. 123(C), pages 17-29.
    7. Goette, Lorenz & Stutzer, Alois, 2008. "Blood donations and incentives : evidence from a field experiment," Working papers 2008/05, Faculty of Business and Economics - University of Basel.
    8. Amelie F. Constant & Klaus F. Zimmermann, 2011. "Migration, Ethnicity and Economic Integration," Chapters,in: International Handbook on the Economics of Integration, Volume III, chapter 7 Edward Elgar Publishing.
    9. Alaoui, Larbi, 2008. "The value of useless information," MPRA Paper 11411, University Library of Munich, Germany.
    10. Fernando Aguiar & Pablo Branas-Garza & Maria Paz Espinosa & Luis Miller, 2010. "Personal identity: a theoretical and experimental analysis," Journal of Economic Methodology, Taylor & Francis Journals, vol. 17(3), pages 261-275.
    11. Constant, Amelie F. & Gataullina, Liliya & Zimmermann, Klaus F., 2009. "Ethnosizing immigrants," Journal of Economic Behavior & Organization, Elsevier, vol. 69(3), pages 274-287, March.
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    14. Nmadu, Job N. & Simpa, James O., 2014. "Rethinking The Technical Efficiency Of Small Scale Yam Farmers In Nigeria Using Conventional And Non-Conventional Inefficiency Parameters," 2014 Conference (58th), February 4-7, 2014, Port Maquarie, Australia 165866, Australian Agricultural and Resource Economics Society.
    15. Krysiak, Frank C. & Oberauner, Iris Maria, 2010. "Environmental policy à la carte: Letting firms choose their regulation," Journal of Environmental Economics and Management, Elsevier, vol. 60(3), pages 221-232, November.
    16. Panos Mavrokonstantis, 2015. "Modern Family: Female Breadwinners and the Intergenerational Transmission of Gender Norms," STICERD - Public Economics Programme Discussion Papers 27, Suntory and Toyota International Centres for Economics and Related Disciplines, LSE.
    17. Adriani, Fabrizio & Sonderegger, Silvia, 2009. "Why do parents socialize their children to behave pro-socially? An information-based theory," Journal of Public Economics, Elsevier, vol. 93(11-12), pages 1119-1124, December.
    18. Michael Kremer, Tom Wilkening, 2010. "Protecting Antiquities: A Role for Long-Term Leases?," Department of Economics - Working Papers Series 1114, The University of Melbourne.
    19. Yan Chen & Sherry Xin Li, 2009. "Group Identity and Social Preferences," American Economic Review, American Economic Association, vol. 99(1), pages 431-457, March.
    20. Constant, Amelie F. & Nottmeyer, Olga & Zimmermann, Klaus F., 2009. "Cultural Integration in Germany," IZA Discussion Papers 4675, Institute for the Study of Labor (IZA).

    More about this item

    Keywords

    anticipatory utility; bargaining; hedonic treadmill; identity; memory; religion; self-control; self-image; self-serving beliefs; taboos; wishful thinking;

    JEL classification:

    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making
    • Z13 - Other Special Topics - - Cultural Economics - - - Economic Sociology; Economic Anthropology; Language; Social and Economic Stratification

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