One of the core concepts of culture is in groups and out groups. Generally, humans identify themselves as part of a social group. We can then easily categorize people based on whether they are in or out of that social group. This gives us a basis for interacting with people and understanding their intentions.

People naturally prefer their own group. For example, product quality studies have shown that people will rate products made in their own country more highly than products made outside of their country, even if they are actually the exact same product.

Categories and generalizations are necessary for us to process the world without getting overwhelmed. As we will discuss in a moment, those categories only become a problem when we apply them blindly as stereotypes. Further problems develop when we act out on those stereotypes, creating prejudice and discrimination.