Self-fulfilling beliefs about social status

Human beings care a lot about being viewed as 'smart'. This paper defines social status as the public beliefs about one's 'smartness' inferred from one's publicly observed social mobility experience. This status motive can easily generate multiple equilibria based upon self-fulfilling beliefs. It also tends to amplify the inequality of economic success between agents with different social origins. This theory of persistent inequality is compared with other theories of inequality based upon self-fulfilling beliefs, such as the model of statistical discrimination and the model of learning about one's chances of mobility in the absence of a status motive, as well the sociological theories of Merton, Boudon and Bourdieu. (C) 1998 Elsevier Science S.A. All rights reserved.