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Reputation, Social Identity and Social Conflict

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  • John Smith

    (Rutgers University-Camden)

Abstract

We interpret the psychology literature on social identity and examine its implications in a population partially composed of such agents. We model a population of agents from two exogenous and well defined social groups. Agents are randomly matched to play a reduced form bargaining game. We show that this struggle for resources drives a conflict through the rational destruction of surplus. We assume that the population contains both rational players and behavioral players. Behavioral players aggressively discriminate against members of the other social group. The existence and specification of the behavioral player is motivated by the social identity literature. For rational players, group membership has no payoff relevant consequences. We show that rational players can contribute to the conflict by aggressively discriminating and that this behavior is consistent with existing empirical evidence. Our paper relates to the empirical literature which finds that our measure of social heterogeneity tends to be increasing in economic variables which we interpret as signifying inefficiency. We provide an explanation that, as social groups compete for the benefits of public goods, disagreement and inefficiency can result. Our work also relates to the social conflict literature, which examines the relationship between macro level factors such as unemployment and civil disturbances. This literature finds that the amount of social conflict tends to be increasing in what we refer to as the inequitability of the environment.

Suggested Citation

  • John Smith, 2007. "Reputation, Social Identity and Social Conflict," Departmental Working Papers 200709, Rutgers University, Department of Economics.
  • Handle: RePEc:rut:rutres:200709
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    References listed on IDEAS

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    Cited by:

    1. Martin Kolmar & Andreas Wagener, 2019. "Group Identities in Conflicts," Homo Oeconomicus: Journal of Behavioral and Institutional Economics, Springer, vol. 36(3), pages 165-192, December.
    2. Drydakis, Nick, 2021. "Social Rejection, Family Acceptance, Economic Recession and Physical and Mental Health of Sexual Minorities," GLO Discussion Paper Series 936, Global Labor Organization (GLO).
    3. 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.
    4. Roland Bénabou & Jean Tirole, 2007. "Identity, Dignity and Taboos: Beliefs as Assets," Carlo Alberto Notebooks 50, Collegio Carlo Alberto.
    5. Johnston, David W. & Lordan, Grace, 2016. "Racial prejudice and labour market penalties during economic downturns," European Economic Review, Elsevier, vol. 84(C), pages 57-75.
    6. Johnston, David W. & Lordan, Grace, 2014. "When work disappears: racial prejudice and recession labour market penalties," LSE Research Online Documents on Economics 56110, London School of Economics and Political Science, LSE Library.

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    More about this item

    Keywords

    reputation; conflict; identity;
    All these keywords.

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • D74 - Microeconomics - - Analysis of Collective Decision-Making - - - Conflict; Conflict Resolution; Alliances; Revolutions
    • L14 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Transactional Relationships; Contracts and Reputation

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