RITUALS OR GOOD WORKS: SOCIAL SIGNALING IN RELIGIOUS ORGANIZATIONS

We develop a model of social signaling of religiosity and cooperative behavior in religious organizations. The model embeds a ritual‐based religious organization in which signaling arises through the use of costly rituals, and a discipline‐based religious organization in which such signaling occurs through the monitoring of past behavior. We use this framework to contrast—positively and normatively—these two forms of social signaling. We show that ritual‐based religions, while using a costly and wasteful signal, also imply a higher level of coordination of behavior in social interactions and a higher incidence of mutual cooperation. Our welfare analysis suggests that communities are more likely to support a switch to a discipline‐based religion if strategic complementarities are high, and if there is sufficiently high level of public information about social behavior. This accords with the success of Calvin's Reformation in Switzerland and France, a process characterized by the reduction of rituals along with the creation of institutions to monitor and publicize individuals' behavior, such as the Consistory.