2. Religious Clubs: The Strategic Role of Religious Identity

Religious identity not only defines group boundaries but also imposes costs on members. We examine the strategic role of costly religious sacrifice and stigma. Strict religious clubs are defined by costly entry requirements and participation rules, including stigmatizing forms of dress, speech, and diet. In the canonical model (Iannaccone, Journal of Political Economy 100(2): 271–291, 1992), these prohibitions and proscriptions are designed to solve incentive problems associated with collective production by (1) screening out non-cooperators and (2) inducing substitution from outside activity to group activity. Recent research identifies four new strategic functions of religious costs: (3) social sorting, (4) esteem maintenance, (5) religious commitment, and (6) cultural resistance. This produces new explanations for exotic religious beliefs, oppositional identity, political mobilization by religious groups, and religious radicalization. All strategic functions of religious identity are examples of the theory of the second best.