The impulse to construct character and story out of available materials is part of our narrative intelligence, one of the fundamental ways that humans go about understanding the world. It is very important to realize that to the extent that character is not given by the author, narrative intelligence predisposes us to construct it. Contrariwise, If I'm just shooting, I'm going to construct a character for myself from the material at hand. If I'm playing a character, the force at work is empathy . If there is no character to play, and I construct that character myself out of the choices I make and the actions I am taking, then I move from empathy to identity .
Identity can serve a positive purpose, especially in learning.
When I worked at Atari, I spent a good bit of time talking to kids about games. I learned, for example, that when a child sees himself as captain of a starship, he may identify with the role to the extent that his sense of his own limitations can be suspended. This experience may later feed back to change his sense of his own capabilities. The flipside of this is not so good. In the case where empathy is replaced by identity, character construction may become concatenated with the construction of the self.