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In economic terms, this conflicted decision can be modeled as a trade-off between the outcome utility gained by hedging (e.g., money) and the diagnostic costs it incurs (e.g., disloyalty). People make inferences about their beliefs and identity from their behavior. If the diagnostic cost of this self-signal and the resulting identity change are substantial, it may outweigh the outcome utility of hedging, and he or she may reject even very generous hedges.


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