Choosing Who You Are: The Structure and Behavioral Effects of Revealed Identification Preferences

Social identity is an important driver of behavior. But where do differences in social identity come from? We use a novel laboratory experiment based on a revealed preference approach to analyze how individuals choose their identity. Facing a trade-off between monetary payments and belonging to different groups, individuals are willing to forego significant earnings to avoid certain groups and thereby reveal their identification preferences. We then show that these identification preferences are systematically related to behavioral heterogeneity in group-specific social preferences. These results illustrate the importance of identification as a choice and its relevance for explaining individual behavior.