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Competition Between Exclusive Religions: The Counter-Reformation As Entry Deterrence

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  • Mario Ferrero

Abstract

type="main" xml:id="sjpe12045-abs-0001"> This article sets forth a theory of competition between exclusive religions as an entry deterrence game, in which the incumbent may find it profitable not to accommodate but to deter the competitor's entry by precommitting to sufficient capacity expansion in the event of entry. If entry costs are high enough, deterrence is optimal and the incumbent remains a monopolist, although the entry threat distorts its effort upward. The model is then applied to the Catholic Church's reaction to the Protestant Reformation. It is argued that the model provides a better fit to the historical data of the Counter-Reformation than the price-cutting model proposed by economists Ekelund, Hébert and Tollison ([Ekelund, R. B., 2004], [Ekelund, R. B., 2006]).

Suggested Citation

  • Mario Ferrero, 2014. "Competition Between Exclusive Religions: The Counter-Reformation As Entry Deterrence," Scottish Journal of Political Economy, Scottish Economic Society, vol. 61(3), pages 280-303, July.
    • Handle: RePEc:bla:scotjp:v:61:y:2014:i:3:p:280-303
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    File URL: http://hdl.handle.net/10.1111/sjpe.2014.61.issue-3
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    References listed on IDEAS

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    1. Eswaran Mukesh, 2011. "Competition and Performance in the Marketplace for Religion: A Theoretical Perspective," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 11(1), pages 1-36, March.
    2. Cugno, Franco & Ferrero, Mario, 2004. "Competition among volunteers," European Journal of Political Economy, Elsevier, vol. 20(3), pages 637-654, September.
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    6. Ferrero, Mario, 2008. "The triumph of Christianity in the Roman empire: An economic interpretation," European Journal of Political Economy, Elsevier, vol. 24(1), pages 73-87, March.
    7. Mario Ferrero, 2014. "Competition between Judaism and Christianity: Paul's Galatians as Entry Deterrence," Kyklos, Wiley Blackwell, vol. 67(2), pages 204-226, May.
    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. Mario Ferrero, 2002. "Competition for Sainthood and the Millennial Church," Kyklos, Wiley Blackwell, vol. 55(3), pages 335-360, August.
    10. James D. Montgomery, 1996. "Dynamics Of The Religious Economy," Rationality and Society, , vol. 8(1), pages 81-110, February.
    11. Cornes,Richard & Sandler,Todd, 1996. "The Theory of Externalities, Public Goods, and Club Goods," Cambridge Books, Cambridge University Press, number 9780521477185, January.
    12. Robert B. Ekelund & Robert F. Hebert & Robert D. Tollison, 2004. "The Economics of the Counter-Reformation: Incumbent-Firm Reaction to Market Entry," Economic Inquiry, Western Economic Association International, vol. 42(4), pages 690-705, October.
    13. Alberto Cassone & Carla Marchese, 1999. "The Economics of Religious Indulgences," Journal of Institutional and Theoretical Economics (JITE), Mohr Siebeck, Tübingen, vol. 155(3), pages 429-429, September.
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