Professional Documents
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Chaim Fershtman
Chaim Fershtman
Chaim Fershtman
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American
EconomieJournal:Microeconomics
3 (May2011): 139-164
http://www.aeaweb.org/articles.php?doi=10.1257/mic.3.2.139
139
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140 AMERICANECONOMIC JOURNAL:MICROECONOMICS MAY2011
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VOL 3 NO. 2 FERSHTMANETAL : TABOOS,IDENTITIES 141
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142 AMERICANECONOMIC JOURNAL:MICROECONOMICS MAY2011
12In
addition, manyharshsanctionsandpenalties.
itis notclearthatwe enjoylivingin a societythatprescribes
3Forexample,itis notlegalto sellhorsemeatin California, whilein someEuropeancountiesthereareshops
thatspecializein suchmeat.
Someactivities maybecometabooas a reflection (forexample,alcoholconsump-
ofthereligiousprohibition
tionin Islamiccountries).
For example,kosherrestrictions implynotjust thatone cannoteat porkor seafood,buteveryfoodthat
touchesnon-kosher foodbecomesnonkosher.Thesetypesofrulesemphasisthe"contamination effect."
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VOL 3 NO. 2 FERSHTMANETAL: TABOOS,IDENTITIES 143
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144 AMERICANECONOMIC JOURNAL:MICROECONOMICS MAY2011
A. StableTaboos
19 In termsofourmodel,suchheterogene-
benefits.
Clearlytheremightbe heterogeneity
withrespecttoprivate
itywill tabooswhicharekeptbypartofthepopulation
also generate andviolatedbyothers.
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VOL 3 NO. 2 FERSHTMANET AL: TABOOS,IDENTITIES 145
• Nc- be thepercentage
ofpeoplethatconsiderdeviatingfromthetaboo.
• Nd- be thepercentage
ofpeoplethatactuallydeviatefromthetaboo.
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146 AMERICANECONOMIC JOURNAL:MICROECONOMICS MAY2011
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VOL.3 NO. 2 FERSHTMANETAL: TABOOS,IDENTITIES 147
B. TheChoiceofIdentity
systemwithrespectto{/b...,/„}is
DEFINITION 2: A StableIdentity
'
(i) T*- Afullspecification
ofthetaboos strengths.
| T*j)are thepercentageofindividuals
(iii) N*(ij | T*j)andN*d(iJ j that
ofidentity
considera deviationand {respectively)actuallydeviatefromtabooi.
24 thatare not
are all examplesof elementsof theidentity
and sometimesnationality
Gender,caste,family,
chosen,andcannotbe changedeasily.
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148 AMERICANECONOMIC JOURNAL:MICROECONOMICS MAY2011
Suchthat
Remark:
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VOL 3 NO. 2 FERSHTMANETAL: TABOOS,IDENTITIES 149
II. StableTaboosandPrivateBenefits
A. A SimpleSetup
В. StableTaboos
Sincethecostofconsidering a deviation,
as well as thecostofdeviationitself,are
increasingin ф, thereis a thresholdфс(Т,b, q) suchthatonlyindividualsof type
Ф ^ ФС{Т,b, q) willconsiderdeviating.Using(1), фс is definedas follows:
(2) «7;M)smin{_¿_,1}.
The strengthof thetaboois endogenously determinedby theproportion of the
populationthatconsidersbreakingit and thosethatactuallybreakit.Lettingфс be
theproportionofindividualsthatconsiderbreakingthetaboo,thenqфc willbe the
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150 AMERICAN ECONOMIC JOURNAL: MICROECONOMICS MAY 2011
1 l Stable
j
I Stable /taboo
ч
[pLc + OLd) '^ taboo № + ЗД v i /
т* >Ц^ -,*./ЫГ Unstable
ofindividuals
proportion thatactuallybreakit.25Т(фс),thestrength
ofthetaboo,is
givenby:
(3) Т{фс) = ac(l - фс) + ad{' - дфс) = (ac + ad) - (ac + qad)</>c.
25Since
proportionq of the individuals thatconsider deviating actually deviate (afterobserving a positive pri-
vate benefitrealization), we get thatNd = дфс.
гь Wheneverthereare fixedcosts of deviation
(independentof thetype) or when thedistributionof ф is such that
Ф > 0min> 0, we may obtain stable taboos thatno one considers violating.
Observe thatthe point фс = 1 is not a stable taboo in this case.
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VOL 3 NO. 2 FERSHTMANETAL: TABOOS,IDENTITIES 151
ofGreaterPrivateBenefits
C. TheEffect on Taboos
+ + qS)
(4) ¿ = (ac ad)''
4q(ac + qad)
Thispointalso definestheweakesttaboothatmaystillhold:
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152 AMERICANECONOMIC JOURNAL:MICROECONOMICS MAY2011
V ' Initial
Ь
у
(ас + ad) Y' ' increaseinb
Slight
ToЦг^Л
у j^^sã^^ ***•••..., Largeincreaseinb
PROOF:
See AppendixA.
28Notethatifthe in the
problemwas onlya declineofchildmortality, thenit wouldhaveonlybeenreflected
premiums forsuchinsurance. Anyempiricalstudythatattempts to studytheearlydaysof lifeinsurance,and in
particularchildlifeinsurance,
shouldintegrate themarket andsocial aspectsoftheproblem, andthefactthatsuch
an insurancewas violatinga taboo.Whileinformation on pricesand quantities
are observable,
usingthefactthat
agentswhosoldchildinsurance visitedclientsin theirhomescan tracetheeffectofsocialinteraction
on individu-
als' insurancedecisions.
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VOL 3 NO. 2 FERSHTMANETAL: TABOOS,IDENTITIES 153
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154 AMERICANECONOMIC JOURNAL:MICROECONOMICS MAY2011
Giventheseconditions
we can concludethefollowing:
PROOF:
See AppendixВ .
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VOL.3 NO. 2 FERSHTMANETAL: TABOOS,IDENTITIES 155
29
Clearly,thereare aspectsof our identity whichare beyondour controland determined uponbirthintoa
specificfamily, tribe,religion, orgender.Butthereareotheraspectsofidentity
nationality, whichpeoplechoose.
JUAswe laterprovein our framework, it is impossibleto have a stabletaboo systemwithmorethantwo
identities.
Clearly,in a moregeneralsetup,we mayassumedifferent externalityfunctions.But sincetheexternality
function is totallyexogenousto ourmodel,we assumethatitis identicalin bothsocietiesin orderto havea setup
in whichthechoiceof individuals willbe determined solelyon theirtype,and on thebehaviorof otherpeoplein
thetwogroups.
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156 AMERICANECONOMIC JOURNAL:MICROECONOMICS MAY2011
• j ч,
32Thisresultis sensitive
toourspecificsetup.Ifwe changetheexternality the
ortheotherprimitives,
function,
societyin whichthereis a mixture
modelcan generatea multi-identity whofollowor deviatefrom
ofindividuals
thetabooinbothidentities.
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VOL 3 NO. 2 FERSHTMANETAL: TABOOS,IDENTITIES 157
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158 AMERICANECONOMIC JOURNAL:MICROECONOMICS MAY2011
whichimpliesthefollowing
restrictions
on theparameters:
The second conditionis thatthe line UA(TA, ф) will not lie entirelybelow
UB(TB,ф). In otherwords,thereexistsa typeф forwhichUA(TA, ф) > UB(TB,ф).
Thiscondition willbe satisfied
whenUA(TA9 ф) > ETB.To identify typeф, notethat
thistypeis indifferent
betweenidentities
A andB, andno matter whathischoiceis,
he wouldconsiderdeviating fromthetaboo.The typeф indifference condition
is:
whichyields:
ETb - ET* К
(10)
1 j Ф=
ф -
=
+
(A qS)[TB TA] +
(X qSy
InsertingthisvalueintoUA(TA,ф) impliesthatUA(TA,ф) = qb; hence,thesecond
requirementforhavinga stableidentity
societywithtwodifferentidentities
is that
> the
qb ETB.Consequently, necessary condition
for a stabletwo-identity
society
is,then,
PROOF:
See AppendixС
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VOL 3 NO. 2 FERSHTMANETAL: TABOOS,IDENTITIES 159
V. ConcludingRemarks
33Whileidentities
observed,it can be a partof a survey.Violationof some tabooscan be
cannotbe directly
observed(likeclothing,
directly marriage,
intergroup choiceof work,etc). Otherscan be derivedfromsocial sur-
veys.The UN EconomicandSocial Surveyasksindividuals, in different theirsocial
societies,questionsregarding
concerns, andviewsregarding
identity, socialaspectsofthesocietiestheylivein.One can also trytobuild
different
a dataseton thebehaviorandidentity
ofdifferent
immigration groups.
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160 AMERICANECONOMIC JOURNAL:MICROECONOMICS MAY2011
thesespecialcircumstances
is partofthedefinition
ofwhomwe areandwhatis our
identity.
AppendixA: Proof of Proposition 1
The conditions thatgiverisetothethreecases: Equations(2) and(3) yielda qua-
draticequation:(ac + qad)(X + qS)</>l- (ac + Oid)(X+ qS)</>c+ qb = 0.
We defineA = -
(ac + ad)2(X+ qS)2 4(ac + qad){' + qS)qb
WhenД < 0, we arein case (A).
WhenA = 0, condition(3) is tangent to condition(4).
WhenA > 0, cases (B) and (C) arise:Therearetwosolutionsforthequadratic
equation-
Define:
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VOL 3 NO. 2 FERSHTMANETAL: TABOOS,IDENTITIES 161
Solvingtheabovequadraticequationyieldsthat:
'
2(ac + qad)(X + qS)
To examinehowchangesin/xaffect
thetaboo,we examinethefollowing
derivatives:
+ Sqb(ac + qad).
Define:
b=
(A + ^)[(ac + adf{2 - 4/x)+ (ac + arf)(ac+ gad)(4^ - 1) - ц{ас + qadf'
4q(ac + qad)
b > b ^ÇÛL > 0
b < ¿ ^ ф- < o.
a/i
We nowexaminetheeffectsofchangesin thedegreeofhomogeneity
ц on theper-
of
centage deviation
fromthetaboo:
=
-(v/Ã7^ + (2 - q)ad] + (A + ^)[(ac + a,)2(2 - 4/i)
- 4qb(ac+
qad))/2(ac+ qad)^Ã'.
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162 AMERICANECONOMIC JOURNAL:MICROECONOMICS MAY2011
Define:
O/l
b>b=>^<0. O/l
• b > b: Increasing/xcouldinducetabooformation.
• b < b < b: Increasingfiwillnevercreatea taboo.On theotherhand,lower-
ing/icouldinducetabooformation. Ifa taboois formed
inthisdomain,further
lowering/iwouldweakenthistaboo.
• b < b: Increasing/xwillnevercreatea taboo.Lowering/icouldinducetaboo
formation.Ifa taboois formed,
lowering /ifurther
wouldstrengthen
thistaboo.
• b > b: Increasing
/istrengthensthetaboo.
• b < b < b: Increasing thetaboobutcan also inducea switchto
'i strengthens
case A.
• b < b: Increasing
/iweakensthetabooandcouldalso inducea switchto case
A. Lowering/istrengthens thetaboobutdoes notinducea switchtocase A.
Equation(11) statesthenecessarycondition
fora two-identity
society.Thiscon-
ditionrequiresthat
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VOL 3 NO. 2 FERSHTMANETAL: TABOOS,IDENTITIES 163
The percentage
ofindividuals fromthetabooin groupВ
whoconsiderdeviating
is:
(A2'
{ } c =
мв Ф = ^
l-ф'+ф (A + qS)TA- qb + ETB
ofthetaboois definedby
The strength
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GeorgeA. 1976. "The Economicsof Caste and of theRat Race and OtherWoefulTales."
Akerlof,
QuarterlyJournalofEconomics,90(4): 599-617.
GeorgeA. 1980."A TheoryofSocial Custom,ofWhichUnemployment
Akerlof, May Be One Conse-
quence."QuarterlyJournalofEconomics,94(4): 749-75.
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164 AMERICANECONOMIC JOURNAL:MICROECONOMICS MAY2011
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