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Categorical Cognition: A Psychological Model of Categories and Identification in Decision Making

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Author Info
Roland G. Fryer (University of Chicago)
Matthew O. Jackson (California Institute of Technology)

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Abstract

This paper introduces a psychological notion of categorization into economics and derives its implications for economic decision making. We show, using a tractable model of social cognition, that a decision maker in (efficiently) assigning past experiences to categories, will sort experiences of interaction with larger (majority) groups more finely than experiences with smaller (minority) groups. We then apply the model to understand simple forms of discrimination and social identity. It is shown that discrimination in hiring can result from such cognitive processes even when there is no malevolent taste to do so and workers' qualifications are fully observable. The model also provides a framework that is equipped to investigate the social psychological

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Paper provided by EconWPA in its series Microeconomics with number 0211002.

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Date of creation: 04 Nov 2002
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Handle: RePEc:wpa:wuwpmi:0211002

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Related research
Keywords: categorization; discrimination; bounded rationality;

Other versions of this item:

Find related papers by JEL classification:
D10 - Microeconomics - - Household Behavior - - - General
D80 - Microeconomics - - Information, Knowledge, and Uncertainty - - - General
I30 - Health, Education, and Welfare - - Welfare and Poverty - - - General
J15 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Minorities and Races; Non-labor Discrimination
J71 - Labor and Demographic Economics - - Labor Discrimination - - - Hiring and Firing

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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Cornell, Bradford & Welch, Ivo, 1996. "Culture, Information, and Screening Discrimination," Journal of Political Economy, University of Chicago Press, vol. 104(3), pages 542-71, June. [Downloadable!] (restricted)
  2. Phipps Arabie, 1991. "Was euclid an unnecessarily sophisticated psychologist?," Psychometrika, Springer, vol. 56(4), pages 567-587, December. [Downloadable!] (restricted)
  3. Phelps, Edmund S, 1972. "The Statistical Theory of Racism and Sexism," American Economic Review, American Economic Association, vol. 62(4), pages 659-61, September. [Downloadable!] (restricted)
  4. Roland G. Fryer, Jr. & Steven D. Levitt, 2002. "Understanding the Black-White Test Score Gap in the First Two Years of School," NBER Working Papers 8975, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
    Other versions:
  5. Joel L. Schrag, 1999. "First Impressions Matter: A Model Of Confirmatory Bias," The Quarterly Journal of Economics, MIT Press, vol. 114(1), pages 37-82, February. [Downloadable!] (restricted)
  6. Jackson, Matthew O. & Kalai, Ehud, 1997. "Social Learning in Recurring Games," Games and Economic Behavior, Elsevier, vol. 21(1-2), pages 102-134, October. [Downloadable!] (restricted)
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  7. Kim-Sau Chung, 2000. "Role Models and Arguments for Affirmative Action," American Economic Review, American Economic Association, vol. 90(3), pages 640-648, June. [Downloadable!] (restricted)
  8. Hanming Fang, 2001. "Social Culture and Economic Performance," American Economic Review, American Economic Association, vol. 91(4), pages 924-937, September. [Downloadable!] (restricted)
  9. Barberis, Nicholas & Shleifer, Andrei, 2003. "Style investing," Journal of Financial Economics, Elsevier, vol. 68(2), pages 161-199, May. [Downloadable!] (restricted)
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  10. George A. Akerlof & Rachel E. Kranton, 2000. "Economics And Identity," The Quarterly Journal of Economics, MIT Press, vol. 115(3), pages 715-753, August. [Downloadable!] (restricted)
  11. Kenneth Arrow, 1971. "The Theory of Discrimination," Working Papers 403, Princeton University, Department of Economics, Industrial Relations Section.. [Downloadable!]
  12. Philippe Jeniel, 2001. "Analogy-Based Expectation Equilibrium," Economics Working Papers 0003, Institute for Advanced Study, School of Social Science. [Downloadable!]
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  13. repec:fth:harver:1908 is not listed on IDEAS
  14. repec:att:wimass:192014 is not listed on IDEAS
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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Basu, Kaushik, 2006. "Identity, Trust and Altruism: Sociological Clues to Economic Development," Working Papers 06-05, Cornell University, Center for Analytic Economics. [Downloadable!]
  2. Steven D. Levitt, 2003. "Testing Theories of Discrimination: Evidence from "Weakest Link"," NBER Working Papers 9449, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
    Other versions:
  3. Vendrik,Maarten C.M. & Schwieren,Christiane, 2005. "Identification, screening and stereotyping in labor market discrimination," Research Memoranda 013, Maastricht : METEOR, Maastricht Research School of Economics of Technology and Organization. [Downloadable!]
  4. Kaushik Basu, 2005. "Racial conflict and the malignancy of identity," Journal of Economic Inequality, Springer, vol. 3(3), pages 221-241, December. [Downloadable!] (restricted)
    Other versions:
  5. Hanming Fang & Glenn C. Loury, 2004. "Toward an Economic Theory of Dysfunctional Identity," Boston University - Department of Economics - The Institute for Economic Development Working Papers Series dp-146, Boston University - Department of Economics. [Downloadable!]
    Other versions:
  6. Stefano DellaVigna & Matthew Gentzkow, 2009. "Persuasion: Empirical Evidence," NBER Working Papers 15298, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  7. Kaushik Basu, 2007. "Participatory Equity, Identity, and Productivity Policy Implications for Promoting Development," Working Papers id:1122, esocialsciences.com. [Downloadable!]
    Other versions:
  8. Oxoby, Robert J & Finnigan, Hugh, 2005. "Developing Heuristic-Based Quality Judgements: Attention Blocking in Consumer Choice," MPRA Paper 1523, University Library of Munich, Germany. [Downloadable!]
  9. Antecol, Heather & Cobb-Clark, Deborah A., 2004. "Identity and Racial Harassment," IZA Discussion Papers 1149, Institute for the Study of Labor (IZA). [Downloadable!]
    Other versions:
  10. Avner Ben-Ner & Brian McCall & Massoud Stephane & Hua Wang, . "Identity and Self-Other Differentiation in Work and Giving Behaviors: Experimental Evidence," Working Papers 0805, Industrial Relations Center, University of Minnesota (Twin Cities Campus). [Downloadable!]
    Other versions:
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