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

Ferrero, Mario

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 (, ).

COUNTER-Reformation; ECONOMIC competition; REFORMATION; EQUILIBRIUM; RELIGIONS; CATHOLIC Church history; HISTORY of religion; PROTESTANT history

Scottish Journal of Political Economy, 2014, Vol 61, Issue 3, p280

0036-9292

Academic Journal

10.1111/sjpe.12045