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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, University Library of Munich, Germany.
  • Handle: RePEc:wpa:wuwpot:0406005
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    References listed on IDEAS

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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.

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    More about this item

    Keywords

    Sects; religion; tithes; religious markets; occupational choice;
    All these keywords.

    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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