Toward an Economic Theory of Dysfunctional Identity
49 Pages Posted: 20 Oct 2004
Date Written: October 2004
Abstract
We advance a novel choice-theoretic model of identity based on the notions of categories and narratives. Identity is conceived as a matter of "reflexive perception" - how people understand themselves. Choosing an identity is equivalent to making a generalization about one's past that highlights the most salient aspects of experience. When many individuals make a common choice in this regard, they embrace a collective identity which is dysfunctional if it is Pareto dominated by an alternative self-classificatory schema. Using a simple multi-stage risk sharing game, we explore conditions under which dysfunctional collective identities might be expected to emerge.
Keywords: Identity; Dysfunctional Collective Identity
JEL Classification: Z1, Z13
Suggested Citation: Suggested Citation
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