Endogenous Social Identity in Agent-Based Economics: From Micro-Categorisation to Macro-Firm Structure

Alejandra López de Aberasturi Gómez, Daniel Jarne Ornia, Arnau Quera-Bofarull, Jordi Sabater-Mir, Carles Sierra

Keywords: Agent-Based Modelling, Social Identity, Self-Categorisation, Firms, Labour Mobility.

Abstract:

Agent-based models of labour mobility reproduce robust macro-regularities such as heavy-tailed firm-size distributions, yet typically represent workers as purely individual utility maximisers. Identity-based economics introduces non-pecuniary motives, but most implementations treat identity categories and identification strength as exogenous.

We develop an agent-based labour economy in which firm identity salience emerges endogenously from contextual social contrast, measured through the Meta-Contrast Ratio and embedded in a salience-weighted utility. Identity does not impose norms; it shifts the evaluative frame through which effort and mobility are assessed.

Large-scale simulations show that stronger identification has heterogeneous and non-monotonic effects: it can either increase or reduce effort depending on alignment between individual preferences and firm prototypes. Importantly, endogenous identity dynamics preserve the heavy-tailed firm-size structure of baseline models, demonstrating that psychologically grounded micro-mechanisms can coexist with established macro regularities.

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Submission Number: 19