How can prejudice be a response to threats to self-esteem? How does prejudice relate to group interests?

Prejudice is a negative opinion about a person or group of people that is not based on actual experience. Discrimination occurs when a person acts on their prejudice. The development of prejudice can occur in many different ways. Research has shown that individuals may develop prejudice as an attempt to build self-value when a person's self-esteem is threatened. This can occur in two ways. Individuals may ally themselves with a winning/ dominant group against a losing/ minority group. Alternatively, individuals may act on their prejudice on a person-to-person basis as an active manifestation of their belief that they are inherently better than the other person, discriminating to boost their self-esteem. When people experience an event that causes a drop in their self-esteem, they become more likely to act on prejudice in order to rebuild their self-esteem. For example, in the 1980s, Detroit autoworkers discriminated heavily against Japanese people after suffering widespread job losses. Their job loss motivated them to seek other avenues to rebuild their self-worth, which in this case was at the expense of Japanese people.
Prejudice plays a role in both inter-group and intra-group dynamics. Research has shown that individuals have increased self-esteem when they affiliate themselves with a group they believe to be better than another group. This behavior naturally leads to the formation of prejudices against other groups in order to establish the internal valuation system that favors the person's group over others. Affiliation with groups boosts individual self-esteem, and a group of individuals that hold the same prejudice will be unified on that basis.
The relationship between self-esteem and prejudice may seem grim. These behaviors indicate that people build their own worth at the expense of others. Though people do use prejudice as a means of developing self-esteem, one solution is simply to eliminate the person's deficit of self-esteem by building their worth in other ways. There are many ways to build self-esteem that do not come at the expense of other people. Creating self-esteem in healthy ways may decrease a person's perceived need to discriminate against others.
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