ECONOMICS AND IDENTITY IN THE 21ST CENTURY: AN ANALYSIS OF CONTRIBUTIONS BY AKERLOF AND KRATON, SEN AND DAVIS

Abstract

The goal of this paper is introducing key economics’ approaches that deal with
the concept of identity. The key approaches are: a) Akerlof and Kranton’s mainstream model
of which takes identity into account as associate it with an externality that limits or maximizes
the utility of individuals through social interaction; b) Amartya Sen’s approach that relates
identities toe commitment, which is a form of human behavior opposed to maximizing
individual self-interest; c) the social identity of John Davis, it comes from the personal and
individual identities, so that human behavior encompasses personal aspects, but leaving
the individualization of individuals inserted in social contexts. The paper also introduces a
debate on how the three approaches emphasize that the concept of “identity” should be
embedded in economic studies. This debate relies on decision-making and considers how
psychological and sociological elements were inserted into the approaches.