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Competition Between Exclusive Religions: The Counter-Reformation As Entry Deterrence

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  • Mario Ferrero

Abstract

type="main" xml:id="sjpe12045-abs-0001"> This article sets forth a theory of competition between exclusive religions as an entry deterrence game, in which the incumbent may find it profitable not to accommodate but to deter the competitor's entry by precommitting to sufficient capacity expansion in the event of entry. If entry costs are high enough, deterrence is optimal and the incumbent remains a monopolist, although the entry threat distorts its effort upward. The model is then applied to the Catholic Church's reaction to the Protestant Reformation. It is argued that the model provides a better fit to the historical data of the Counter-Reformation than the price-cutting model proposed by economists Ekelund, Hébert and Tollison ([Ekelund, R. B., 2004], [Ekelund, R. B., 2006]).

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  • Mario Ferrero, 2014. "Competition Between Exclusive Religions: The Counter-Reformation As Entry Deterrence," Scottish Journal of Political Economy, Scottish Economic Society, vol. 61(3), pages 280-303, July.
    • Handle: RePEc:bla:scotjp:v:61:y:2014:i:3:p:280-303
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    File URL: http://hdl.handle.net/10.1111/sjpe.2014.61.issue-3
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    References listed on IDEAS

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    1. Eswaran Mukesh, 2011. "Competition and Performance in the Marketplace for Religion: A Theoretical Perspective," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 11(1), pages 1-36, March.
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    4. Mario Ferrero, 2002. "Competition for Sainthood and the Millennial Church," Kyklos, Wiley Blackwell, vol. 55(3), pages 335-360, August.
    5. Ferrero, Mario, 2008. "The triumph of Christianity in the Roman empire: An economic interpretation," European Journal of Political Economy, Elsevier, vol. 24(1), pages 73-87, March.
    6. Cugno, Franco & Ferrero, Mario, 2004. "Competition among volunteers," European Journal of Political Economy, Elsevier, vol. 20(3), pages 637-654, September.
    7. James D. Montgomery, 1996. "Dynamics Of The Religious Economy," Rationality and Society, , vol. 8(1), pages 81-110, February.
    8. Robert B. Ekelund, Jr. & Robert F. Hebert & Robert D. Tollison, 2002. "An Economic Analysis of the Protestant Reformation," Journal of Political Economy, University of Chicago Press, vol. 110(3), pages 646-671, June.
    9. Cornes,Richard & Sandler,Todd, 1996. "The Theory of Externalities, Public Goods, and Club Goods," Cambridge Books, Cambridge University Press, number 9780521477185.
    10. Iannaccone, Laurence R, 1992. "Sacrifice and Stigma: Reducing Free-Riding in Cults, Communes, and Other Collectives," Journal of Political Economy, University of Chicago Press, vol. 100(2), pages 271-291, April.
    11. Pedro Pita Barros & Nuno Garoupa, 2002. "An Economic Theory Of Church Strictness," Economic Journal, Royal Economic Society, vol. 112(481), pages 559-576, July.
    12. Iannaccone, Laurence R, 1995. "Risk, Rationality, and Religious Portfolios," Economic Inquiry, Western Economic Association International, vol. 33(2), pages 285-295, April.
    13. Robert B. Ekelund & Robert F. Hebert & Robert D. Tollison, 2004. "The Economics of the Counter-Reformation: Incumbent-Firm Reaction to Market Entry," Economic Inquiry, Western Economic Association International, vol. 42(4), pages 690-705, October.
    14. Mario Ferrero, 2014. "Competition between Judaism and Christianity: Paul's Galatians as Entry Deterrence," Kyklos, Wiley Blackwell, vol. 67(2), pages 204-226, May.
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