Culture as Cognition and Behavior: How Categorization Can Shape Interaction (and How Leaders Can Shape Categorization?)

For decades, economists paid minuscule attention to culture, but this is changing rapidly. One view of culture emphasizes “values that ethnic, religious, and social groups transmit fairly unchanged from generation to generation” (Guiso et al., 2006: 23), and one way to model such values is to enrich the arguments of an actor’s utility function to include actions by others in the actor’s social context (e.g., Hoff and Stiglitz, 2016).