Persistent Divides in Beliefs, Conflict, and Innovation

Many Christian supporters of Mr. Donald Trump favored restrictive immigration policies against Libya, Syria and other Muslim countries during his presidency. A cause behind this seems to be a persistent divide in certain beliefs between Christianity and Islam, even though the two religions also share many common beliefs. This paper builds a simple model in which such divide over a historical fact can persist even when strong scientific evidence exists in favor of the fact and all agents are using Bayesian learning. In the model, both innovation and conflict are more likely to occur in firms with more diversified workers, while education can reduce the probability of conflict to occur. Given these results, we argue that education to honor and understand other people's beliefs (rather than educating that one particular view is rational or justified and the others are not) is beneficial for promoting innovation, in addition to impeding conflict.