Inequality and Social Comparisons

I present a model in which people develop certain traits (or skills) and also assign worth to those traits. The worth a person assigns to different traits are the person’s values. These values can be used to evaluate one’s own traits and the traits of others. I show that when people are incentivized to place more value on skills for which they are comparatively advantaged, people with lower opportunities for success may be led to adopt more extreme values, to perform below their own capabilities, and to perpetually experience cognitive dissonance by developing skills that are inconsistent with their own values. Attempts to induce low-status individuals to invest in certain skills by increasing the marginal productivity of those skills can backfire, leading to increased inequality. ∗Associate Professor of Political Science, Washington University in St. Louis. Email: [email protected]. I am grateful to Daniel Diermeier, Jon Eguia, Mat McCubbins, William Minozzi, John Patty, Jason Roberts, and seminar participants at the University of North Carolina, the London School of Economics, the Ohio State University, and Washington University in St. Louis for helpful comments on various iterations of this project.