TY  - RPRT
        AU  - Benabou, Roland
AU  - Tirole, Jean
        TI  - Identity, Dignity and Taboos: Beliefs as Assets
        PY  - 2007/Jan/
        PB  - Institute of Labor Economics (IZA)
        CY  - Bonn
        T2  - IZA Discussion Paper
        IS  - 2583
        UR  - https://www.iza.org/publications/dp2583
        AB  - We analyze social and economic phenomena involving beliefs which people value and invest in, for affective or functional reasons. Individuals are at times uncertain about their own “deep values” and infer them from their past choices, which then come to define “who they are”. Identity investments increase when information is scarce or when a greater endowment of some asset (wealth, career, family, culture) raises the stakes on viewing it as valuable (escalating commitments). Taboos against transactions or the mere contemplation of tradeoffs arise to protect fragile beliefs about the “priceless” value of certain assets (life, freedom, love, faith) or things one “would never do”. Whether such behaviors are welfare-enhancing or reducing depends on whether beliefs are sought for a functional value (sense of direction, self-discipline) or for “mental consumption” motives (self-esteem, anticipatory feelings). Escalating commitments can thus lead to a “hedonic treadmill”, and competing identities cause dysfunctional failures to invest in high-return activities (education, adapting to globalization, assimilation), or even the destruction of productive assets. In social interactions, norm violations elicit a forceful response (exclusion, harassment) when they threaten a strongly held identity, but further erode morale when it was initially weak. Concerns for pride, dignity or wishful thinking lead to the inefficient breakdown of Coasian bargaining even under symmetric information, as partners seek to self-enhance and shift blame by turning down “insultingly low” offers.
        KW  - self control
KW  - anticipatory utility
KW  - wishful thinking
KW  - memory
KW  - self-image
KW  - self-serving beliefs
KW  - identity
KW  - hedonic treadmill
KW  - bargaining
KW  - taboos
KW  - religion
        ER  -