Signalling in Social Networks: An Empirical Study of Denominational Fractionalization in the USA
An economic signalling model contributing to the explanation of religious schism is presented. Religious groups are interpreted as a device for exchanging information about and via others. Two effects result. First, the larger the network, the worse the signal quality one receives of the type of other members. Second, the larger a network, the more potentially valuable information is available. A modernizing economy is characterized by increasing overall transaction costs. Economizing on transaction costs by splitting from existing groups, and therefore increasing the signal value, could bear an economic advantage. Supporting empirical data are presented. In our view, our findings also contribute to the explanation of the so-called Kelley Thesis, stating that religious movements with stricter enforcement of their behavioural norms are growing in size, while such with rather liberal attitudes toward their norm enforcement face a loss of members. Supporting historical and empirical results are presented.
|Date of creation:||Dec 2006|
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|Contact details of provider:|| Web page: http://www.iibf.ege.edu.tr/economics/|
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- Wacziarg, Romain & Alesina, Alberto & Devleeschauwer, Arnaud & Easterly, William & Kurlat, Sergio, 2002.
1744, Stanford University, Graduate School of Business.
- Alberto Alesina & Arnaud Devleeschauwer & William Easterly & Sergio Kurlat & Romain Wacziarg, 2002. "Fractionalization," Harvard Institute of Economic Research Working Papers 1959, Harvard - Institute of Economic Research.
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Middlebury College Working Paper Series
0206, Middlebury College, Department of Economics.
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- Carpenter, Jeffrey P., 2004. "Punishing Free-Riders: How Group Size Affects Mutual Monitoring and the Provision of Public Goods," IZA Discussion Papers 1337, Institute for the Study of Labor (IZA).
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