Job Market Paper

On the Origin and Persistence of Identity-Driven Choice Behavior

This paper provides a novel explanation for identity-driven choice behavior, that does not rely on built-in differences in preferences, discrimination or social pressures, but works through the optimal management of confidence. Agents observe social identity cues that stem from the prevalence of their subgroup among the successful individuals in the social context, and find it rational to let their choices be driven by these social identity cues, even when these cues do not directly affect utility. The influence on choice differs across types, but is not driven by ability differences between subgroups. I show the existence of a stable population equilibrium in which the task allocation and the use of social identity cues differ between a priori identical subgroups.

Keywords: Social Identity, Decision Making, Uncertainty, Diversity

Work In progress

Socially Biased Signals for Success

The Social Context, Confidence and Subjective Beliefs: An Experiment


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