Economics-of-Religious-Communities wp
The paper develops a novel economic "religious club" model that simultaneously incorporates (i) positive network externalities among members, (ii) two forms of discrimination – blanket discrimination affecting all members and stigma targeting actively religious members – and (iii) competition among multiple religious leaders. Starting from the classic Iannaccone (1992) club framework, the authors introduce a minimum participation requirement (strictness) set by leaders to mitigate free‑riding. They analyze a monopoly setting where a single leader chooses strictness, deriving conditions for three equilibrium types: (1) cohesive (all members join), (2) exclusive (only high‑commitment types join), and (3) zero‑participation (assimilation). Comparative statics show that higher economic development and stigma increase social integration, while blanket discrimination and a larger share of high‑commitment members reduce integration and can trigger fragmentation. Fragmentation manifests as either assimilation of moderates or a schismatic split into separate high‑ and low‑commitment clubs when competition is allowed. Under competition, a new "schismatic equilibrium" emerges, and leaders set strictness at welfare‑maximizing levels, leading to lower overall religious participation and higher integration compared to monopoly – a result that contradicts the traditional religious‑markets hypothesis. The paper provides detailed analytical results (propositions, lemmas, and proofs), phase diagrams illustrating equilibrium regions, and policy‑relevant guidance for empirical work on religious discrimination, emphasizing the need to distinguish between blanket discrimination and stigma, to examine distributional effects, and to account for the internal club structure when interpreting integration outcomes.
Topics
Innovative Club Model Combining Network Externalities, Discrimination, and Competition
Introduces a unified theoretical framework that extends the classic religious club model by adding positive network externalities, two distinct discrimination mechanisms, and the possibility of multiple competing leaders.