IDEAS home Printed from https://ideas.repec.org/p/wpa/wuwpmi/0211002.html
   My bibliography  Save this paper

Categorical Cognition: A Psychological Model of Categories and Identification in Decision Making

Author

Listed:
  • Roland G. Fryer

    (University of Chicago)

  • Matthew O. Jackson

    (California Institute of Technology)

Abstract

This paper introduces a psychological notion of categorization into economics and derives its implications for economic decision making. We show, using a tractable model of social cognition, that a decision maker in (efficiently) assigning past experiences to categories, will sort experiences of interaction with larger (majority) groups more finely than experiences with smaller (minority) groups. We then apply the model to understand simple forms of discrimination and social identity. It is shown that discrimination in hiring can result from such cognitive processes even when there is no malevolent taste to do so and workers' qualifications are fully observable. The model also provides a framework that is equipped to investigate the social psychological

Suggested Citation

  • Roland G. Fryer & Matthew O. Jackson, 2002. "Categorical Cognition: A Psychological Model of Categories and Identification in Decision Making," Microeconomics 0211002, University Library of Munich, Germany.
  • Handle: RePEc:wpa:wuwpmi:0211002
    Note: Type of Document - pdf. preliminary version - comments welcome
    as

    Download full text from publisher

    File URL: https://econwpa.ub.uni-muenchen.de/econ-wp/mic/papers/0211/0211002.pdf
    Download Restriction: no

    Other versions of this item:

    References listed on IDEAS

    as
    1. Jehiel, Philippe, 2005. "Analogy-based expectation equilibrium," Journal of Economic Theory, Elsevier, vol. 123(2), pages 81-104, August.
    2. George A. Akerlof & Rachel E. Kranton, 2000. "Economics and Identity," The Quarterly Journal of Economics, Oxford University Press, vol. 115(3), pages 715-753.
    3. Phipps Arabie, 1991. "Was euclid an unnecessarily sophisticated psychologist?," Psychometrika, Springer;The Psychometric Society, vol. 56(4), pages 567-587, December.
    4. Moro, Andrea & Norman, Peter, 2004. "A general equilibrium model of statistical discrimination," Journal of Economic Theory, Elsevier, vol. 114(1), pages 1-30, January.
    5. Kim-Sau Chung, 2000. "Role Models and Arguments for Affirmative Action," American Economic Review, American Economic Association, vol. 90(3), pages 640-648, June.
    6. Gilboa,Itzhak & Schmeidler,David, 2001. "A Theory of Case-Based Decisions," Cambridge Books, Cambridge University Press, number 9780521802345, December.
    7. Kenneth Arrow, 1971. "The Theory of Discrimination," Working Papers 403, Princeton University, Department of Economics, Industrial Relations Section..
    8. Jackson, Matthew O. & Kalai, Ehud, 1997. "Social Learning in Recurring Games," Games and Economic Behavior, Elsevier, vol. 21(1-2), pages 102-134, October.
    9. Barberis, Nicholas & Shleifer, Andrei, 2003. "Style investing," Journal of Financial Economics, Elsevier, vol. 68(2), pages 161-199, May.
    10. Cornell, Bradford & Welch, Ivo, 1996. "Culture, Information, and Screening Discrimination," Journal of Political Economy, University of Chicago Press, vol. 104(3), pages 542-571, June.
    11. Phelps, Edmund S, 1972. "The Statistical Theory of Racism and Sexism," American Economic Review, American Economic Association, vol. 62(4), pages 659-661, September.
    12. Roland G. Fryer & Steven D. Levitt, 2004. "Understanding the Black-White Test Score Gap in the First Two Years of School," The Review of Economics and Statistics, MIT Press, vol. 86(2), pages 447-464, May.
    13. Hanming Fang, 2001. "Social Culture and Economic Performance," American Economic Review, American Economic Association, vol. 91(4), pages 924-937, September.
    14. Matthew Rabin & Joel L. Schrag, 1999. "First Impressions Matter: A Model of Confirmatory Bias," The Quarterly Journal of Economics, Oxford University Press, vol. 114(1), pages 37-82.
    15. repec:fth:harver:1908 is not listed on IDEAS
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Fang, Hanming & Norman, Peter, 2001. "Government-Mandated Discriminatory Policies," Working Paper Series 562, Research Institute of Industrial Economics.
    2. Maarten Vendrik & Christiane Schwieren, 2010. "Identification, screening and stereotyping in labour market discrimination," Journal of Economics, Springer, vol. 99(2), pages 141-171, March.
    3. Lommerud, Kjell Erik & Vagstad, Steinar, 2000. "Mommy Tracks and Public Policy: On Self-Fulfilling Prophecies and Gender Gaps in Promotion," CEPR Discussion Papers 2378, C.E.P.R. Discussion Papers.
    4. Dario Cestau & Dennis Epple & Holger Sieg, 2017. "Admitting Students to Selective Education Programs: Merit, Profiling, and Affirmative Action," Journal of Political Economy, University of Chicago Press, vol. 125(3), pages 761-797.
    5. Patricio S. Dalton & Sayantan Ghosal & Anandi Mani, 2016. "Poverty and Aspirations Failure," Economic Journal, Royal Economic Society, vol. 126(590), pages 165-188, February.
    6. Antonio Filippin, 2003. "Discrimination and workers' expectations," Departmental Working Papers 2003-15, Department of Economics, Management and Quantitative Methods at Università degli Studi di Milano.
    7. Robert Oxoby, 2009. "Understanding social inclusion, social cohesion, and social capital," International Journal of Social Economics, Emerald Group Publishing, vol. 36(12), pages 1133-1152, October.
    8. Natalia Zinovyeva & Manuel F. Bagues, 2010. "Does gender matter for academic promotion? Evidence from a randomized natural experiment," Working Papers 2010-15, FEDEA.
    9. Kaushik Basu, 2016. "Beyond the Invisible Hand: Groundwork for a New Economics," Economics Books, Princeton University Press, edition 1, number 9299, October.
    10. Filippin, Antonio, 2003. "Discrimination and Workers' Expectations," IZA Discussion Papers 823, Institute of Labor Economics (IZA).
    11. Claudia Goldin, 2002. "The Rising (and then Declining) Significance of Gender," NBER Working Papers 8915, National Bureau of Economic Research, Inc.
    12. Moro, Andrea & Norman, Peter, 2003. "Affirmative action in a competitive economy," Journal of Public Economics, Elsevier, vol. 87(3-4), pages 567-594, March.
    13. Lepage, Louis Pierre, 2020. "Endogenous learning and the persistence of employer biases in the labor market," CLEF Working Paper Series 24, Canadian Labour Economics Forum (CLEF), University of Waterloo.
    14. Stanley D. Longhofer & Stephen R. Peters, 1998. "Self-selection and discrimination in credit markets," Working Papers (Old Series) 9809, Federal Reserve Bank of Cleveland.
    15. David Austen-Smith & Roland G. Fryer, 2003. "The Economics of 'Acting White'," NBER Working Papers 9904, National Bureau of Economic Research, Inc.
    16. Shelly Lundberg & Richard Startz, 1998. "Race, Information, and Segregation," Discussion Papers in Economics at the University of Washington 0047, Department of Economics at the University of Washington.
    17. Dennis Epple & Richard Romano & Holger Sieg, 2008. "Diversity and Affirmative Action in Higher Education," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 10(4), pages 475-501, August.
    18. Neal, Derek, 2006. "Why Has Black-White Skill Convergence Stopped?," Handbook of the Economics of Education, in: Erik Hanushek & F. Welch (ed.),Handbook of the Economics of Education, edition 1, volume 1, chapter 9, pages 511-576, Elsevier.
    19. Claudia Goldin, 2014. "A Pollution Theory of Discrimination: Male and Female Differences in Occupations and Earnings," NBER Chapters, in: Human Capital in History: The American Record, pages 313-348, National Bureau of Economic Research, Inc.
    20. Paul Frijters, 2003. "Testing for Employee Discrimination using Matched Employer-Employee Data: Theory and Evidence," Paul Frijters Discussion Papers 2003-1, School of Economics and Finance, Queensland University of Technology.

    More about this item

    Keywords

    categorization; discrimination; bounded rationality;

    JEL classification:

    • D10 - Microeconomics - - Household Behavior - - - General
    • D80 - Microeconomics - - Information, Knowledge, and Uncertainty - - - General
    • I30 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General
    • J15 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Minorities, Races, Indigenous Peoples, and Immigrants; Non-labor Discrimination
    • J71 - Labor and Demographic Economics - - Labor Discrimination - - - Hiring and Firing

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:wpa:wuwpmi:0211002. 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: (EconWPA). General contact details of provider: https://econwpa.ub.uni-muenchen.de .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.