A Cartel that Lasts for Centuries: The Case of the Eastern Orthodox Church Indulgences
ALBA Graduate Business School
ALBA Graduate Business School; Yale SOM International Center for Finance
Southern Connecticut State University
April 3, 2012
In this paper, we present a non-conventional case of collusive behavior and tactics that last for centuries. In particular, we focus on the process through which the Patriarchates of the Eastern Orthodox Church (specifically, those of Constantinople, Jerusalem, Antioch, and Alexandria) distributed indulgences to believers in their jurisdictions during the period between the sixteenth and the seventeenth centuries. By employing a wide variety of primary sources such as correspondence among the various patriarchates and among individual clerics, printing orders for indulgences, and income-expenditure records, among others, we present evidence of oligopolistic interaction and behavior among the various Patriarchates in the distribution of indulgences. The observed long-duration of this collusive structure is the outcome of high barriers to entry, well defined market segmentation, effective monitoring, a strong enforcement mechanism and finally no product innovation. Overall, the data suggest that, besides their spiritual importance, indulgences were promoted in a way that resembles very much the distribution method and process of any typical product in a modern market economy.
Number of Pages in PDF File: 36
Keywords: Cartel, Collusive behavior, Indulgences, Oligopolistic interaction, Regulation
JEL Classification: A12, D12, L4, L43
Date posted: June 8, 2012 ; Last revised: June 13, 2012
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