Towards Better Economic Models of Social Behaviour? Identity Economics

Ille, Sebastian (2017) Towards Better Economic Models of Social Behaviour? Identity Economics. Studies in Ethnicity and Nationalism, 17 (1). pp. 5-24. ISSN 14738481

Abstract

In recent years, a growing literature emerged studying the role of identity in economics. Yet, mainstream economists and other social scientists still eye identity economics with suspicion. This article illustrates the underlying assumptions of identity economics, gaps in the literature, as well as existing tools and research in other domains of economic theory that help to close these gaps, while demonstrating that identity economics is able to provide sophisticated approaches and additional findings that support transdisciplinary research on the topic. In order to demonstrate how these tools can be used to study the complex social systems in which identity, preferences, and institutions co-evolve, I develop a number of simple analytical models and elaborate on their implications, while keeping technicalities to a minimum. In addition, I show how findings in behavioural economics apply to identity economics and prove insightful for our understanding of the complex interdependencies between identity and group formation.

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