Us and `Them': the origin of identity, and its economic implications

B. Eaton (), Mukesh Eswaran and Robert Oxoby

Canadian Journal of Economics, 2011, vol. 44, issue 3, 719-748

Abstract: We investigate the origins of identity and the innate proclivity to draw a distinction between `insiders' and `outsiders'. We propose an evolutionary explanation: we argue that identity arises because it facilitates survival. In an evolutionary setting we endogenize preferences and demonstrate that the evolutionarily stable preferences fashioned by natural selection would distinguish between insiders and outsiders. We then work out the implications of such preferences in two contemporary scenarios, one entailing rent-seeking behaviour and the other involving public good provision. Our results are in conformity with empirical evidence.

JEL-codes: D03 D72 D87 H00 (search for similar items in EconPapers)
Date: 2011
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Citations: View citations in EconPapers (30)

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