Revisiting sacrifice and stigma: Why older churches become more liberal

This paper revisits the concept of ‘Sacrifice and Stigma’ first introduced in the seminal model of Iannaccone, published in 1992. Iannaccone provides an explanation for the rise of strict churches in face of the decline of liberal ones. He argues that costly and stigmatizing requirements, which make a church distinctive and strict, reduce free-riding in the group, conferring it a competitive edge. His model, however, does not address the question of why certain churches, generally older and larger, become more liberal and easygoing. I argue that for established groups, which rely on intergenerational transmission of religious preference, ‘sacrifice and stigma’ are no longer means of screening free-riders but determine the depreciation rate of the stock of religious capital of the group. Modeling the setting as a differential game, I show that in such circumstances, a reduction in the required ‘sacrifice and stigma’ increases the steady-state level of contribution to the church.