Edited by Luigino Bruni and Stefano Zamagni
Chapter 19: Identity
The concept of identity has begun to be employed only relatively recently in economics, and accordingly still lacks a standard meaning and established set of applications in the subject. However, in its most influential initial uses by Amartya Sen (1999) and George Akerlof and Rachel Kranton (2000) it has been developed largely in terms of the concept of social identity (though in quite different ways). Social identity as understood in social psychology (see Brown, 2000), where the concept was influentially developed by Erik Erikson in connection with his idea of an identity crisis (Erikson, 1950), concerns individuals’ ‘identification with’ social groups of which they are members. There are different ways of understanding the idea of ‘identification with,’ with both more psychological and sociological types of interpretations, but generally it means that individuals treat the characteristics of the social group with which they identify as their own individual characteristics, for example, as when people think of themselves as individuals having a certain nationality, gender, or religion. Akerlof and Kranton, then, adopt this sort of understanding when they rewrite the standard utility function representation of the individual to include a vector of self-images which people are said to have in virtue of their having corresponding characteristics associated with certain social groups. Sen employs the same idea that social group characteristics and social identities are applied to individuals and influence how they think of themselves, but in contrast he also argues that individuals deliberate over whether to embrace these assignments.
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