Working Paper BETA #2022-15

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Title : The Signaling Value of Social Identity

Author(s) : Arnaud Wolff

Abstract : This paper proposes a theory of social identity adoption and expression, which ties the choice of social identity to material and social benefits present in an individual’s social environment. I argue that in an environment in which receivers aim at uncovering the sender’s motives and commitments, the beliefs and values adopted by an individual can serve as a signal of trustworthiness. In such an environment, individuals are expected to adopt the social identity which will provide them with the greatest amount of (social) benefits. I formalize this choice in a game-theoretic framework, embed in a broader niche selection structure. I argue that the main predictions of the model help illuminate several empirical findings, such as the malleability of beliefs and values, the resistance of beliefs and values to evidence, and the existing correlation between beliefs and values and individual-level traits such as personality.

Key-words : Social Identity, Beliefs, Values, Trustworthiness, Social Incentives

JEL Classification : C72, C73, D83, D91