CRITIQUE ON IDENTITY ECONOMICS

Abstract

Identity economics has acquired its literature in the last twenty years. However, the theoretical and methodological consistency of the concept is still quite weak, or the claims are no longer as sharp as it was at the beginning. Therefore, most of the followers of Akerlof and Kranton (2000) have considered identity as a variable rather than a vital part of the mechanism in explaining the behaviors. Except for John B. Davis, there is no attempt to clarify the arguments in the literature. Davis developed critiques to achieve the theoretical simplicity of identity economics. Although identity is a very complex concept, Davis insists on explaining it in an economic mechanism. Even if experimental research seems to be the applicable methodology for identity economics, in Kranton’s research, the results of experiments present us systematic heterogeneity in social preferences for differentiated social identities which means there is no smooth behavioral path in her research yet to support the same claims in theory. In this article, we propose ethnographic and sociological field researches that can support the methodology that provide the purpose and result consistency. Although modeling identity might be evaluated as full of incoherence due to the problematics of identity economics, it brings us a broader parameter to understand differentiated social characteristics and preferences. This article seeks to simplify the modeling of identity and clarify progressive steps in the literature considering critical recommendations.