Final answer:
Social identity theory suggests that we categorize people as belonging to an in-group or an out-group, which forms the basis of our self-concept and can lead to in-group bias and discrimination.
Step-by-step explanation:
The theory that suggests when we first come into contact with others, we categorize them as belonging to an in-group or an out-group is b) Social identity theory. Initially developed by Henri Tajfel and John Turner in the 1970s, this theory addresses how we derive part of our self-concept from our perceived membership in social groups, such as gender, race, or social class. These groups play a critical role in our identity and self-esteem, and we often show a preference for our own group (in-group) over others (out-group), leading to in-group bias. This bias can manifest in both positive feelings towards the in-group and negative attitudes towards the out-group, potentially resulting in prejudice and discrimination. Understanding the dynamics of social identity theory can help explain various social behaviors and attitudes, including ethnocentrism, racism, sexism, and other forms of discrimination.