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Optimal Self-Screening and the Persistence of Identity-Driven Choices

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  • Liqui Lung, C. W.

Abstract

Equally performing individuals belonging to different social groups make different occupational and educational choices. I propose a novel explanation for this phenomenon by showing how agents can use statistics about the prevalence of their social type among those successful in a task to limit the adverse effects of momentary noise on decision making when they cannot control for this noise as a Bayesian would. This improves decision making on average, even when the statistics are informationally irrelevant, but can create persistent asymmetries in choice behavior across otherwise identical individuals with different social types that are not driven by ability differences.

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  • Liqui Lung, C. W., 2022. "Optimal Self-Screening and the Persistence of Identity-Driven Choices," Cambridge Working Papers in Economics 2274, Faculty of Economics, University of Cambridge.
    • Handle: RePEc:cam:camdae:2274
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    Cited by:

    1. Liqui-Lung, C., 2023. "Intersectionality in Individual Choice Behavior: Pitfalls and Opportunities," Cambridge Working Papers in Economics 2379, Faculty of Economics, University of Cambridge.

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    More about this item

    Keywords

    Bounded Rationality; Decision Making; Social Identity;
    All these keywords.

    JEL classification:

    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making
    • Z13 - Other Special Topics - - Cultural Economics - - - Economic Sociology; Economic Anthropology; Language; Social and Economic Stratification

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