Donkor, Kwabena; Goette, Lorenz; Müller, Maximilian W.; … - 2023
This paper examines how beliefs and preferences drive identity-conforming consumption or investments. We introduce a … theory that explains how identity distorts individuals' beliefs about potential outcomes and imposes psychic costs on … gains from identity-incongruent assets by 9% to 27%. Our counterfactual simulations imply that identity-specific beliefs …