Ethnic identity is developed displa

Ethnic identity is developed displayed manipulated or ignored in accordance with the demands of a particular situation (Royce quoted in Ruble,1989,p. 401). It is whatever makes individuals the same or different in comparison to other ethnic groups. It may also encompass a network of strong beliefs,values and what people hold dear it builds and shapes peoples live.Fearon and Laitin (2000) argue that ethnic identities are socially constructed, either by individual actions or by supra-individual discourses of ethnicity. Some studies develop economic theories of ethnic identity and explicitly explore their implications for economic behavior. Kuran (1998) has created a theory of reputational cascades that explains the evolution of behavioral ethnic codes that individuals follow to preserve social acceptance. Th speed of acting ethnic is chosen under the influences of social pressures that the individuals themselves create and sustain. It is fostered by interdependencies among individual incentives that crucially affect personal choices. This theory can explain why similar societies may show very different levels of ethnic activity.