Paper joint with Amma Panin (University of Louvain), Eva Raiber (Aix-Marseille School of Economics) and Paul Seabright (Toulouse School of Economics).

Abstract: 

We propose and develop a new model of faith-based organizations as multi-sided platforms. Platforms are intermediaries that create benefits by putting different users in contact with each other, and they typically appropriate as revenues some share of the benefits they create. We argue that faith-based organisations broadly offer two types of services: (I) A religious service that includes providing a moral narrative, giving moral guidance counselling, and providing a space to access the divine (e.g. through prayer, meditation and ritual), and (II) a networking service that allows members to connect with other members that come primarily for the religious service. These connections can be for a range of reasons including business, finding a spouse, or sharing risk. By offering both services at the same time, religious organisations benefit from the spill-over effect of the religious service which helps to screen for trustworthy network members. They can thus price the services higher than if they were offered separately. The optimal community size depends on the type of network service the organisation provides which can explain the co-existence of small and large religious communities with similar price levels. It can also explain the existence of large religious communities that charge high prices.

For further information please contact: giovanna.tramontano@unibocconi.it