The Economics of Religious Indulgences
We model the Catholic Church as a heterogeneous club managed by a specialized agency that pursues the enlargement of the club within given constraints. Religious indulgences induce the self selection of members, based on their attitudes towards risk. Highly risk-averse members do not relax their moral behaviour even if indulgences are available. Less risk-averse members prefer indulgences, but their availabiltiy is beneficial to the Church. In fiscal and criminal law there are institutions (amnesties) that parallel religious indulgences: here, too, a derogation from a general rule may be justified on the grounds of efficiency.
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Volume (Year): 155 (1999)
Issue (Month): 3 (September)
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