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 behaviors 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:||Jan 2007|
|Date of revision:|
|Contact details of provider:|| Postal: IZA, P.O. Box 7240, D-53072 Bonn, Germany|
Phone: +49 228 3894 223
Fax: +49 228 3894 180
Web page: http://www.iza.org
|Order Information:|| Postal: IZA, Margard Ody, P.O. Box 7240, D-53072 Bonn, Germany|
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.:
- Smith, John, 2009.
"Reputation, social identity and social conflict,"
18082, University Library of Munich, Germany.
- 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.
- Matthew Rabin., 1991.
"Cognitive Dissonance and Social Change,"
Economics Working Papers
91-180, University of California at Berkeley.
- Ulrich Horst & Alan Kirman & Miriam Teschl, 2007.
"Changing Identity: The Emergence of Social Groups,"
Economics Working Papers
0078, Institute for Advanced Study, School of Social Science.
- 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.
- 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.
- 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.
- Wojciech Kopczuk & Joel Slemrod, 2005.
"Denial of Death and Economic Behavior,"
NBER Working Papers
11485, National Bureau of Economic Research, Inc.
When requesting a correction, please mention this item's handle: RePEc:iza:izadps:dp2583. 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: (Mark Fallak)
If references are entirely missing, you can add them using this form.