Stratification economics integrates economics, sociology, and social psychology. It takes the emphasis on process of group identification and identity formation from sociology, including both self- and social classification. It takes the emphasis on self-interested behavior and substantive rationality from economics. It takes the emphasis of social beliefs widely held about the group to whom one belongs as having an impact on affinity towards ones group, individual productivity and performance, particularly via the effects of cognitive dissonance, implicit bias and stereotype threat. Thus, stratification economics conceives of a world where there is continuous interplay at both the macro and micro levels – often competitive and sometimes collaborative – between members of social groups animated by the collective self-interest of the respective members. Groups compete to attain and maintain relative position in a social hierarchy.

Another difference between stratification economics and the orthodox perspective is the presumption of irrationality of discrimination commonly found in the latter. In contrast, stratification economics presumes the rationality of discrimination, that discrimination is functional in promoting the privileged group’s relative status.