Economics and identity

This paper considers how identity, a person's sense of self, affects econom ic outcomes. We incorporate the psychology and sociology of identity into a n economic model of behavior. In the utility function we propose, identity is associated with different social categories and how people in these cate gories should behave. We then construct a simple game-theoretic model showi ng how identity can affect individual interactions. The paper adapts these models to gender discrimination in the workplace, the economics of poverty and social exclusion, and the household division of labor. In each case, th e inclusion of identity substantively changes conclusions of previous econo mic analysis.