Abstract:
Differences in individuals' social identity have recently been shown to explain differences in behavior. But where do differences in social identity come from? Theory claims that identification allows people to affect their social identity by choosing who they are. Accordingly, this paper treats social identity as a choice and analyzes its behavioral effects. We find identification to be systematically related to behavioral heterogeneity in group-specific social preferences. In a first step, we measure identification preferences using a revealed preference approach in a laboratory experiment. Confirming social identity theory, participants reveal a stronger identification preference for groups that have a higher social status and to which they have a smaller social distance. In a second step, we analyze how identification affects subsequent behavior. Between- as well as within-subject heterogeneity in identification preferences explains corresponding heterogeneity in group-specific dictator games. Overall, our paper documents the importance of identification as a choice and its relevance for explaining the frequently observed heterogeneity in identity-related behavior.