Identity Economics: How Our Identities Shape Our Work, Wages, and Well-Being
George A. Akerlof
The topic of this book is very interesting; however, it is basically an elaboration of Akerlof’s AEA presidential address “The Missing Motivation in Macroeconomics.” I became interested in reading the book after reading that address, but the book is more or less a less-technical exposition of the same ideas. The overall thrust is that economists need to incorporate social norms into their models of utility functions, and that doing so can help explain several counterintuitive results that arise when modeling with “homo economicus” utility functions. To non-economists this probably seems like an obvious point, but to us it seems insightful! It connects in my mind with the arguments in “Difficult Conversations”, which postulates that the most difficult-to-resolve conflicts are those that somehow bear on the self-perceived identity of one of the parties. I have seen very strong evidence that this is the case in my own life, and it’s interesting (though challenging) to bring it to the concepts of economic modeling.