IDEAS home Printed from https://ideas.repec.org/p/wpa/wuwpot/0406005.html
   My bibliography  Save this paper

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
    Note: Type of Document - pdf; pages: 19
    as

    Download full text from publisher

    File URL: https://econwpa.ub.uni-muenchen.de/econ-wp/othr/papers/0406/0406005.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    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, President and Fellows of Harvard College, 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. Mark Chaves & David E. Cann, 1992. "Regulation, Pluralism, and Religious Market Structure," Rationality and Society, , vol. 4(3), pages 272-290, July.
    6. Esther Gal-Or, 1983. "Quality and Quantity Competition," Bell Journal of Economics, The RAND Corporation, vol. 14(2), pages 590-600, Autumn.
    7. 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.
    8. Pedro Pita Barros & Nuno Garoupa, 2002. "An Economic Theory Of Church Strictness," Economic Journal, Royal Economic Society, vol. 112(481), pages 559-576, July.
    9. Wilson, Charles A, 1979. "Equilibrium and Adverse Selection," American Economic Review, American Economic Association, vol. 69(2), pages 313-317, May.
    10. Colin Rose, 1993. "Equilibrium and Adverse Selection," RAND Journal of Economics, The RAND Corporation, vol. 24(4), pages 559-569, Winter.
    11. George A. Akerlof, 1970. "The Market for "Lemons": Quality Uncertainty and the Market Mechanism," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 84(3), pages 488-500.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

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

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Carvalho, Jean-Paul & Koyama, Mark, 2016. "Jewish emancipation and schism: Economic development and religious change," Journal of Comparative Economics, Elsevier, vol. 44(3), pages 562-584.
    2. Makowsky, Michael, 2009. "Religious Extremism, Clubs, and Civil Liberties: A Model of Religious Populations," MPRA Paper 14358, University Library of Munich, Germany.
    3. Philipp Ager & Antonio Ciccone, 2018. "Agricultural Risk and the Spread of Religious Communities," Journal of the European Economic Association, European Economic Association, vol. 16(4), pages 1021-1068.
    4. Dehejia, Rajeev & DeLeire, Thomas & Luttmer, Erzo F.P., 2007. "Insuring consumption and happiness through religious organizations," Journal of Public Economics, Elsevier, vol. 91(1-2), pages 259-279, February.
    5. Marek Loužek, 2007. "Ekonomie náboženství - je hypotéza sekularizace opodstatněná? [Economics of religion - is the secularization hypothesis tenable?]," Politická ekonomie, Prague University of Economics and Business, vol. 2007(5), pages 659-680.
    6. Noury, Abdul G. & Speciale, Biagio, 2016. "Social constraints and women's education: Evidence from Afghanistan under radical religious rule," Journal of Comparative Economics, Elsevier, vol. 44(4), pages 821-841.
    7. Sriya Iyer, 2016. "The New Economics of Religion," Journal of Economic Literature, American Economic Association, vol. 54(2), pages 395-441, June.
    8. Panu Poutvaara & Andreas Wagener, 2010. "The invisible hand plays dice: multiple equilibria in sects markets," Public Choice, Springer, vol. 145(3), pages 483-502, December.
    9. Malik, Samreen & Mihm, Benedikt, 2022. "Parental religiosity and human capital development: A field study in Pakistan," Journal of Economic Behavior & Organization, Elsevier, vol. 197(C), pages 519-560.
    10. Pavol Minárik, 2013. "Ekonomie náboženství a její relevance pro ekonomy ve střední Evropě [Economics of Religion and its Relevance for Economists in Central Europe]," Politická ekonomie, Prague University of Economics and Business, vol. 2013(5), pages 691-704.
    11. Laurence Iannaccone & Eli Berman, 2006. "Religious extremism: The good, the bad, and the deadly," Public Choice, Springer, vol. 128(1), pages 109-129, July.
    12. Philipp Ager & Antonio Ciccone, 2013. "Rainfall Risk and Religious Membership in the Late Nineteenth-Century US," Working Papers 2013-17, FEDEA.
    13. Mark Koyama & Jean-Paul Carvalho, "undated". "Development and Religious Polarization: The Emergence of Reform and Ultra-Orthodox Judaism," Discussion Papers 11/11, Department of Economics, University of York.
    14. Paul Shea, 2019. "The Macroeconomics of Pascal’s Wager," Eastern Economic Journal, Palgrave Macmillan;Eastern Economic Association, vol. 45(4), pages 481-496, October.
    15. Yugang He & Jingnan Wang & Baek-Ryul Choi, 2021. "Religious Participation: Does It Matter for Sustainable Culture and Entertainment Consumption?," Sustainability, MDPI, vol. 13(14), pages 1-16, July.
    16. Basedau, Matthias & Gobien, Simone & Prediger, Sebastian, 2017. "The Ambivalent Role of Religion for Sustainable Development: A Review of the Empirical Evidence," GIGA Working Papers 297, GIGA German Institute of Global and Area Studies.
    17. Prosper Raynold, 2013. "Fellowship, social network externalities, and management of religious risk," Rationality and Society, , vol. 25(2), pages 229-260, May.
    18. Esa Mangeloja, 2003. "Application of Economic Concepts on Religious Behavior," Others 0310003, University Library of Munich, Germany.
    19. Simon Fan, C., 2008. "Religious participation and children's education: A social capital approach," Journal of Economic Behavior & Organization, Elsevier, vol. 65(2), pages 303-317, February.
    20. Jean-Paul Carvalho, 2009. "A Theory of the Islamic Revival," Economics Series Working Papers 424, University of Oxford, Department of Economics.

    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

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:wpa:wuwpot:0406005. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: EconWPA (email available below). General contact details of provider: https://econwpa.ub.uni-muenchen.de .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.