NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Categorical Cognition: A Psychological Model of Categories and Identification in Decision Making

Roland G. Fryer, Jr., Matthew O. Jackson

NBER Working Paper No. 9579
Issued in March 2003
NBER Program(s):   LS

There is a wealth of research in psychology demonstrating that agents process information with the aid of categories. In this paper we study this phenomenon in two parts. First, we build a model of how experiences are sorted into categories and how categorization affects decision making. Second, we analyze the personal biases that result from categorization, in economic contexts. We show that discrimination can result from such cognitive processes even when there is no malevolent taste to do so and workers' qualifications are fully observable. The model also provides a framework that is equipped to investigate the social psychological concept of identity, where identity is viewed as self-categorization.

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Document Object Identifier (DOI): 10.3386/w9579

Published: Fryer, Ronald and M. Jackson. “Categorical Cognition: A Psychological Model of Categories and Identification in Decision Making: An Extended Abstract." Proceedings of the 9th conference on Theoretical Aspects of Rationality and Knowledge (2003): 29-34.

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