Identity Economics Notes

“Modern economics follows Adam Smith’s attempt in the eighteenth century to turn moral philosophy into a social science designed to create a good society. Smith enlisted all human passions and social institutions in this effort. In the nineteenth century, economists began to build mathematical models of how the economy worked, using a stick figure of a rationally optimizing human with only economic motivations. As economics evolved into the twentieth century, the models grew more sophisticated, but Homo Economics lagged behind. Fairly recently, behavioral economics has introduced cognitive bias and other psychological findings. Identity Economics, in its turn, brings in social context-with a new economic man and woman who resemble real people in real situations.”

From the trend, we should attach the importance to the organizational behavior, social theories and interaction theory. North had said that the institution transfer evolves by the behaviors ,or people's interactions. Gray Becker, Arrow, North and Akerlof (et al ) lead the way to a new economics-----identity economics or economics embeded human behaviors (not the optional behavior).

This book illustrates the model of the identitiy economics! Identity have three ingredients: social categories (the definition of insiders and outsiders), norms and ideals, as well as losses and gains in identity utility. What's more, the author gives five ways identity to illustrate the economic changes. The five ways as follows: individual actions, externalities, creating categories and norms, identity and regret, and choice of identity.

In a word, Identity economics is at the frontier. It enriches the  current economics of organizations and education,gives us a general understanding of the nation’s social and economic problem. The new economics may just lead to new directions for how best to allocate scarce resoureces and how to use them.

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Do you kow the jobs have tags? How the identity to make organization work? And how to establish the identity models?

If you like the major , join us and read the notes and the book carefully.

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