This paper considers how identity, a person's sense of self, affects economic outcomes. We incorporate the psychology and sociology of identity into an economic model of behavior. In the utility function we propose, identity is associated with different social categories and how people in these categories should behave. We then construct a simple game-theoretic model showing how identity can affect individual interactions. The paper adapts these models to gender discrimination in the workplace, the economics of poverty and social exclusion, and the household division of labor. In each case, the inclusion of identity substantively changes conclusions of previous economic analysis.

The economics of organizations is replete with the pitfalls of monetary rewards and punishments to motivate workers. If economic incentives do not work, what does? This paper proposes that workers' self-image as jobholders, coupled with their ideal as to how their job should be done, can be a major work incentive. It shows how such identities can flatten reward schedules, as they solve "principal-agent" problem. The paper also identifies and explores a new tradeoff: supervisors may provide information to principals, but create rifts within the workforce and reduce employees' intrinsic work incentives. We motivate the theory with examples from the classic sociology of military and civilian organizations.

No abstract

Geography and social links shape economic interactions. In industries, schools, and markets, the entire network determines outcomes. This paper analyzes a large class of games and obtains a striking result. Equilibria depend on a single network measure: the lowest eigenvalue. This paper is the first to uncover the importance of the lowest eigenvalue to economic and social outcomes. It captures how much the network amplifies agents' actions. The paper combines new tools--potential games, optimization, and spectral graph theory--to solve for all Nash and stable equilibria and applies the results to R&D, crime, and the econometrics of peer effects

This review culls noneconomic literature on education--by sociologists, anthropologists, and practitioners to present a new economic theory of students and schools. This theory elaborates two themes that have eluded economic analysis. First is the student as decision-maker whose primary motivation is her identity. Second is a conception of the school as a social institution. This framework suggests a new perspective on questions such as resource allocation and school reform. It explains why some educational policies succeed and others fail. We show how sociological variables may affect outcomes, and suggest ways economists can incorporate them into theoretical and empirical research.

No abstract

This paper develops a new model of economic exchange: networks, rather than markets, of buyers and sellers. In contrast to the assumption that buyers und sellers are anonymous, this paper begins with the empirically motivated premise that a buyer and seller must have a relationship, or "link," to engage in exchange. Broadly delined. a "link" is anything that makes possible or adds value to a particular bilateral exchange. An extensive literature in sociology, anthropology, as well as economics, records the existence and multifaceted nature of such links. In manufacturing, customized equipment or any specific asset is a link between two firms.' Relationships with extended family members, cocthnics, or "fictive kin" are links that reduce

This paper develops a new model of economic exchange: networks, rather than markets, of buyers and sellers. In contrast to the assumption that buyers und sellers are anonymous, this paper begins with the empirically motivated premise that a buyer and seller must have a relationship, or "link," to engage in exchange. Broadly delined. a "link" is anything that makes possible or adds value to a particular bilateral exchange. An extensive literature in sociology, anthropology, as well as economics, records the existence and multifaceted nature of such links. In manufacturing, customized equipment or any specific asset is a link between two firms.' Relationships with extended family members, cocthnics, or "fictive kin" are links that reduce