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The Invisible Hand Plays Dice: Eventualities in Religious Markets

Author

Listed:
  • Panu Poutvaara

    (Centre for Economic & Business Research, CESifo & IZA)

  • Andreas Wagener

    (Department of Economics, University of Vienna, CEBR & CESifo)

Abstract

Religious participation is much more widespread in the United States than in Europe, while Europeans tend to view sects more suspiciously than Americans. We propose an explanation for these patterns without assuming differences in preferences or market fundamentals. Religious markets may have multiple equilibria, suggesting that observed differences in religious structures may merely be eventualities. Further, equilibria with more sects result in higher welfare and lower membership costs, as secular societies tend to host on average more demanding sects. Our main methodological contribution to the theory of religious markets is endogenizing simultaneously supply and demand of spiritual services.

Suggested Citation

  • Panu Poutvaara & Andreas Wagener, 2004. "The Invisible Hand Plays Dice: Eventualities in Religious Markets," Others 0406005, EconWPA.
  • Handle: RePEc:wpa:wuwpot:0406005
    Note: Type of Document - pdf; pages: 19
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    References listed on IDEAS

    as
    1. Eli Berman, 2000. "Sect, Subsidy, and Sacrifice: An Economist's View of Ultra-Orthodox Jews," The Quarterly Journal of Economics, Oxford University Press, vol. 115(3), pages 905-953.
    2. Eli Berman, 2003. "Hamas, Taliban and the Jewish Underground: An Economist's View of Radical Religious Militias," NBER Working Papers 10004, National Bureau of Economic Research, Inc.
    3. Azzi, Corry & Ehrenberg, Ronald G, 1975. "Household Allocation of Time and Church Attendance," Journal of Political Economy, University of Chicago Press, vol. 83(1), pages 27-56, February.
    4. Laurence R. Iannaccone, 1998. "Introduction to the Economics of Religion," Journal of Economic Literature, American Economic Association, vol. 36(3), pages 1465-1495, September.
    5. Esther Gal-Or, 1983. "Quality and Quantity Competition," Bell Journal of Economics, The RAND Corporation, vol. 14(2), pages 590-600, Autumn.
    6. 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.
    7. Pedro Pita Barros & Nuno Garoupa, 2002. "An Economic Theory Of Church Strictness," Economic Journal, Royal Economic Society, vol. 112(481), pages 559-576, July.
    8. Wilson, Charles A, 1979. "Equilibrium and Adverse Selection," American Economic Review, American Economic Association, vol. 69(2), pages 313-317, May.
    9. Colin Rose, 1993. "Equilibrium and Adverse Selection," RAND Journal of Economics, The RAND Corporation, vol. 24(4), pages 559-569, Winter.
    10. George A. Akerlof, 1970. "The Market for "Lemons": Quality Uncertainty and the Market Mechanism," The Quarterly Journal of Economics, Oxford University Press, vol. 84(3), pages 488-500.
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    Cited by:

    1. Helton Saulo & Jeremias Leao, 2011. "Equilibrium, Adverse Selection, and Statistical Distributions," Economics Bulletin, AccessEcon, vol. 31(3), pages 2066-2074.

    More about this item

    Keywords

    Sects; religion; tithes; religious markets; occupational choice;

    JEL classification:

    • L89 - Industrial Organization - - Industry Studies: Services - - - Other
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • D71 - Microeconomics - - Analysis of Collective Decision-Making - - - Social Choice; Clubs; Committees; Associations

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