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Identity Economics: How Our Identities Shape Our Work, Wages, and Well-Being

3.45  ·  Rating Details ·  298 Ratings  ·  41 Reviews
Identity Economics provides an important and compelling new way to understand human behavior, revealing how our identities--and not just economic incentives--influence our decisions. In 1995, economist Rachel Kranton wrote future Nobel Prize-winner George Akerlof a letter insisting that his most recent paper was wrong. Identity, she argued, was the missing element that wou ...more
ebook, 200 pages
Published January 21st 2010 by Princeton University Press (first published 2010)
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Feb 15, 2015 Ryan rated it liked it  ·  review of another edition
While this research was long overdue in the economics community, and the case studies currently relevant, Nobel Prize laureate George Akerlof has failed to tailor this book for any target audience. Too uninspiring for the 'pop sociology' Gladwell-ites, and likewise too vague and self-referential for students of economics, Identity Economics fails to inspire or even inform.
Geoffrey Gordon
Jan 24, 2013 Geoffrey Gordon rated it really liked it  ·  review of another edition
Shelves: economic-theory
I can't believe economists are just now discovering that how people view themselves and their place in society affects the economic decisions they make. Identity economics is a very promising field, and this book represents the tip of the iceberg. The chapters on gender and race left much to be desired, but as this book is merely an introduction to the topic of identity, and because entire books can be (and have been) written on how gender and race/ethnicity influence economic behavior, I'm will ...more
Alex Wang
You do not need this book to understand the academic literature in economics of identity, nor do you need this book if you want to be entertained by the amazing power of identity in human society. So only suitable for those who do research in the area and want a light reading that relevant...
Jun 11, 2017 Lee rated it liked it  ·  review of another edition
Interesting read, though I am skeptical if it is as pathbreaking as the author suggests it is. The book is largely focused on stapling economic understandings to sociological problems. Still, it is probably worth a quick read if the topic interests you. It brings an economic thinking to problems few apply the model to.
Erik Johnson
Feb 05, 2017 Erik Johnson rated it really liked it  ·  review of another edition
Shelves: psychology, economics
Really interesting introduction into identity psychology and how it affects our decision making. It comes more from the economics angle than the psychology one.
Seng Aung
Jul 13, 2017 Seng Aung rated it it was amazing  ·  review of another edition
I like this plain language, the concept as well as no number economic
Jan 07, 2016 Arbraxan rated it liked it  ·  review of another edition
Recommends it for: Economists
Shelves: economics
What is the effect of identity on behavior from an economic perspective? This is the key question which George Akerlof and Rachel Kranton wish to explore in their book "Identity Economics". Akerlof and Kranton argue that many phenomena both within and without the realm of economics - e.g. R-Day at West Point - can be explained neither by standard (neoclassical) economics nor even by behavioral economics, but can be explained by "identity economics". Identity economics, as conceptualized by the a ...more
The author's central thesis is so intuitive and remarkable that it is shocking that economics didn't catch onto this earlier. I have always been hyper-suspect of homo-economicus as too reductionist of human nature. This theory accounts for a large psychological-social aspect of decision making based on the Utility of Identity. As social creatures humans are predisposed to be 'groupish' and these groups create a shared identity based on shared norms and expectations. An individual thus derives ut ...more
Shonna Froebel
Nov 25, 2012 Shonna Froebel rated it really liked it  ·  review of another edition
Grabbed this book from the new book shelf at work as I needed something to listen to on my commute.
It was interesting, but I am glad I have a degree in economics, as some of the terminology was definitely subject specific. It talked about a relatively new aspect of economics that uses individual or group identity perception to predict behaviour. Some types of identity are generally fixed (race, gender), while others are temporary and may change over time. Standard economics says that people woul
Nick Klagge
Sep 17, 2012 Nick Klagge rated it liked it  ·  review of another edition
Shelves: economics
The topic of this book is very interesting; however, it is basically an elaboration of Akerlof's AEA presidential address "The Missing Motivation in Macroeconomics." I became interested in reading the book after reading that address, but the book is more or less a less-technical exposition of the same ideas. The overall thrust is that economists need to incorporate social norms into their models of utility functions, and that doing so can help explain several counterintuitive results that arise ...more
Apr 27, 2012 Frank rated it did not like it  ·  review of another edition
Shelves: non-fiction, business
I started with the misperception this was a book on economics, but it fits better in the business category.

A late section illustrates my view of the book:

.. most economists also believe that a good model yields surprising conculsions.. there must be a gentlemanly distance between assumptions and conclusions, otherwise the theory is vacuous... We are like the sage who explained movement by saying that it is due to the principles of locomotion.

The section goes on to point out two examples of conc
Jul 01, 2015 Diego rated it it was amazing  ·  review of another edition
Akerlof y Kranton deciden incorporar un factor que la economía tradicional ha ignorado. La identidad y con esta idea introducir al estudio económico el impacto de las normas sociales y como estas influencian la conducta humana.

Los autores siguen como guía el trabajo de Gary Becker manipulando funciones de utilidad para incorporar preferencias fuera de lo común en el trabajo de los economistas y aumenta el poder explicativo de la economía partiendo de la teoría clásica de la economía, incorporan
David Lau
Oct 22, 2010 David Lau rated it really liked it  ·  review of another edition
His book has lukewarm reviews but I'm gonna give it a 4 because i think identity economics has great potential. The reader must understand that it is still a field in the fetal stages of development so studies and data are limited.

I was first exposed to identity economics when I read gang leader for a day. The book showed that even though drug dealers made minimum wage (equivalent to a mcdonalds salary), they chose the more risky profession because they wanted to be identified a certain way. Th
Feb 26, 2010 FiveBooks rated it it was amazing  ·  review of another edition
Trevor Phillips OBE ,head of the Equality and Human Rights Commission, has chosen to discuss George A Akerlof and Rachel E Kranton’s Identity Economics: How Our Identities Shape Our Work, Wages and Well-Being , on FiveBooks ( as one of the top five on his subject - Equality, saying that:

“…This recently published book says that one effect of being in an increasingly liberal and affluent society is that aspects of identity that previously didn’t seem to matter that much to e
Roy Kenagy
Oct 13, 2011 Roy Kenagy marked it as to-read  ·  review of another edition
Publisher's blurb:

"Identity Economics bridges a critical gap in the social sciences. It brings identity and norms to economics. People's notions of what is proper, and what is forbidden, and for whom, are fundamental to how hard they work, and how they learn, spend, and save. Thus people's identity--their conception of who they are, and of who they choose to be--may be the most important factor affecting their economic lives. And the limits placed by society on people's ide
Jan 28, 2012 Dan rated it really liked it  ·  review of another edition
How we identify ourselves is vital to the decisions we make, and its something that traditional economics does not address, so I was pleased to stumble onto this book. It is surprisingly short, which makes it an easy read. As intended by the authors, this is just an outline and introduction to how to apply identity utility and the outsider vs. insider paradigm. I think this theory could be extremely useful for analyzing international economics, in addition to the smaller scale issues analyzed in ...more
I certainly agree with the premise of this book - that identity and social norms are critical determinants in the choices individuals make, but I cannot recommend this much too short volume as a means to reach that conclusion. I listened to the audio version of this book - which claimed to be unabridged - but after 3 short discs the book ended abruptly and seemed to draw no conclusions except the very specific results of the few experiments mentioned in the book. I kept waiting for the meat of t ...more
Jeffrey Cavanaugh
A short primer on the utility of adding sociological notions of identity to neoclassical economic analysis - particularly in the form of preference formation and expression. The book is lucid, well-written, and thoughtful, though not particularly compelling for those familiar with the many problems inherent in the rational actor assumptions of homo economicus Consider it another salvo in the ongoing war fought by sociologists, psychologists, and dissident economists against the hegemony of the C ...more
Mar 30, 2014 Samiur rated it really liked it  ·  review of another edition
Not as amazing as Animal Spirits, but again touches on the role of identity and background as part of shaping economics and policies -- but again, anyone reading op-eds by Friedman, Krugman, Stiglitz (or any other Economist for that matter -- heck, throw in Gladwell who's been apparently also classified as an "Economist), among others are aware of identities and backgrounds shaping economic thinking.
Feb 05, 2015 Yogesh rated it really liked it  ·  review of another edition
An extremely fascinating look at how identity can be incorporated in the study of economics and choices. As someone who has always felt uncomfortable with the basic tenets of self-interest and rationality that underlies much of economic thinking and methodology, this book helped me reframe my understanding of economic choices and the usefulness of economics in informing my own field of interest, sociology.
Margaret Sankey
Two astute economists attempt to theorize and quantify why people, based on "in" and "out" group identity, will act against their economic interests. You'd think that the economic backlash from treating certain customers badly, or refusing to hire talented people from a particular group, or clinging to marketing that reflects a stereotypical view would force change, but generally not.
Jan 05, 2013 Ainie rated it really liked it  ·  review of another edition
This book helped me understand why, who, and how we become us. We are very much dependent on our sense of belonging that dictates what we will become. Perhaps with an understanding of where we come from we can become more than who we are today. The economy evolves around the very classification of who we are. Enjoy the book.
Jan 02, 2014 Nina rated it liked it  ·  review of another edition
Shelves: business
Not that difficult of a read, this book is good even for someone who doesn't have the firmest grasp on economics. However, I think its point is rather obvious, though perhaps it's because Akerlof's theories are implemented in today's studies of economics.
Hui Lin Tan
Identity economics merely formalises the takeaways from social psych by giving social psych a framework from which its ideas could flow. Doesn't seem to be offering much more than what social psych already has - in fact, the latter tends to be richer and more insightful.
Sep 02, 2013 Bruce rated it really liked it  ·  review of another edition
Although this book is designed as a primer for use of a relatively new tool of analyzing the impact of identity on economic decisions, the reader soon realizes the potential significance of this concept for other disciplines.
Apr 01, 2016 Laura rated it liked it  ·  review of another edition
Shelves: economics
This is an incredibly dry read, though probably informative. It feels a bit too much like reading a text book. It was a bit too boring for me to continue through, but maybe I'll come back to it sometime.
Oct 03, 2012 Elise rated it liked it  ·  review of another edition
We can't separate our identities from our decisions and the overall ways in which we live our lives - something to keep in mind when faced with any kind of decision-making process. This is an informative and enjoyable book, an interesting meeting of the economics and psychology worlds.
Karan Singh
at last the dismal science catches up with the real world
An interesting and useful economic concept - but the writing itself isn't all that engaging
Ozzie Gooen
Jan 27, 2014 Ozzie Gooen rated it really liked it  ·  review of another edition
I was pleasantly surprised. As others have probably noted, it's quite short and to the point. However, the point made sense to me and I enjoyed the academic research behind it.
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George A. Akerlof is a Professor of Economics at the University of California, Berkeley, and 2001 Nobel Laureate in Economics.
More about George A. Akerlof...

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“We discussed the focus on identity: how people think they and others should behave; how society teaches them how to behave; and how people are motivated by these views, sometimes to the point of being willing to die for them.” 1 likes
“Such interplay of tastes and norms lies at the heart of this book. The merry-go-round illustrates a general point. When people are doing what they think they should be doing, they are happy, like the four- and five-year-olds. But those who are not living up to the norms that they (and others) have set for themselves, like the older children, are unhappy. They then change their decisions to meet their standards.” 1 likes
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