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Life Arts    H4'ed 1/18/14

Buying a Lemon, Be it a Used Car or a Religion

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Rationality is one of the core ideas of economics, suggesting that given the available information about the imminent costs and benefits of a decision, rational people choose an option that best serves their interests of maximizing their gain or minimizing their loss. We exercise this rule, often habitually, for every economic and business decision we make no matter how trivial or critical it may be. In light of this reality, business people spend a great deal of resources collecting and analyzing information relevant to costs and benefits before making a business decision such as investing in a particular project. As unorthodox as it may sound, I would like to argue that such information also plays a significant role in people's decisions concerning the non-economic matter such as choosing a religion and deciding how strictly to fulfill its religious requirements and rituals.

Obviously, if allegiance to a particular religion is mandatory, meaning a person really has no choice, then a number of people in this situation may simply feign adherence to official religion while deep down they have no veneration for it and do not practice its rituals as stipulated, or do so little or no fervor. This may very well happen in some Islamic countries such as Iran. Iran is an autocratic religious government where pretentious devotion to its official religion of Islam serves as a life-saving necessity given the fact that public defiance, criticism, or desecration of its official religion is a crime. Worse yet, converting to another religion is considered an apostasy that is punishable by death.

In countries like Iran, I venture to argue that information concerning assessing the costs and the benefits of religious belief plays a role, especially for those who are marginally attached to the official religion. Obviously religion's non-monetary rewards such as the promise of eternal heavenly life are alluring for many devotees. Nonetheless, this does not mean that monetary benefits do not play a role because they do, especially for the needy, underprivileged denizens who depend on government handouts. The pecuniary benefits of religiosity are considerable in these kinds of theocratic countries.

With respect to religion, when it comes to the role of information, one can claim that the existence of asymmetric information places ordinary believers in a disadvantageous position. That is, the clerics play a commanding role when it comes to ordinary followers choosing a religion or practicing its requirements because, in this case, clerics control the information. Asymmetric information relates to situations in which one party to a deal has more information about what is at stake than the other party, but is unwilling to disclose that information because doing so will undermine his gains or will cause the underlying deal to fall apart if all the relevant information is disclosed. By deceitfully hiding important information, the party who possesses more information can, in fact, increase his control and his gain at the expense of other party. A seller of a used automobile, for instance, has much more information about his vehicle and its existing problems than the potential buyer. However, to protect his self-interests, the seller will not reveal the damaging information, fearing that doing so will jeopardize the transaction. The result of such asymmetric information is the exploitation of one party, the buyer, by the other party, the seller.

Analogously, compared to lay people, the Islamic clerics have a monopoly on access to the wealth of written and oral celestial information that has been accumulated over centuries concerning the heavenly benefits of believing in afterlife as well as the dreadful consequences of not believing.   As absurd as some of this information might be, it is enticing enough to cajole unsuspecting people into the clerics' exploitative trap. Frankly, even though the information clerics possess is mostly unsubstantiated, does not measure up to scientific standards for validity, or is utterly counterintuitive, it remains highly persuasive yet beguiling.   Many of the clerics themselves are aware of the absurdity of some of their claims; however, they withhold from gullible believers any information deemed damaging to their self-interest so they can maintain their reign over people's lives and thus expand their personal gain and power. Such a sarcastic ploy has worked well throughout the long history of religion and it continues to work even in the face of scientific advancement and intellectual progress. Being unable to winnow good information from shoddy information, the naïve believers are in no position to question its credibility or practicality. They are taught by mullahs that it is a sin to question the righteousness of the core or even the minor religious beliefs - of Islam - for doing so will undermine the sanctity of religion and is  a punishable sin under Islamic laws.

When it comes to choosing a religion, there is not much autonomy in Islamic societies because the religion comes with you and is prescribed at birth. You will automatically inherit the religion of your family. If an Iranian had the chance to consciously select a religion that he or she wanted to practice, he or she would be like the person who is a used-car buyer. You try to obtain as much needed information as possible from the sources you trust, especially from the people whom you think have your best interest at heart. However, having the ability to do this is just wishful thinking in Islamic countries because pursuing impartial inquiry is not allowed. Plus, the official religion is mixed with politics and the religious rulers want to muster as many supporters as possible to pad their power base. Imagine you want to buy a used car; obviously, you hesitate to buy it from a stranger or from someone who is suspicious. In such cases, you collect plenty of information and do extensive investigation on your own before finalizing your decision. You do this in an effort to protect your interest; you want to ensure that you are not being defrauded and swindled. However, if you trust the seller or think he is a benevolent individual, you don't hesitate to buy the car, even without much research. Imagine you purchased that car from a trusted person without having made prior inquiries and it happened to be seriously defective; you will lose your money and just as important, or even more important you lose trust in that previously respected person. The painful lesson here is that you need to diligently do your homework before you sign into a deal, or you could end up with a lemon of a car and, likewise, a lemon of a religion.

Additionally, one of the consequences of asymmetric information is adverse selection, the possibility that the pushy seller forced you to make a wrong decision. An example of adverse selection is a real-estate agent creating fear by warning would-be buyers that the house they are thinking of purchasing has a pending contract and they will lose a good deal if they do not act promptly. Another example of adverse selection is a medical doctor who may warn patients of the dire consequence of not seeking further medical treatments even though the doctor knows that the chance of finding a serious problem is infinitesimal. In much the same way as these examples, mullahs can foment fear of eternal damnation in a person who disagrees with him or deserts Islam, even though there is no scientific proof of this and it is a scientific Type I error also known as false positive. Asymmetric-information and adverse-selection situations have been skillfully used by mullahs to mislead people and get them to buy into the defective ideas they are selling under the name of religion.  

Perceptibly, with popularity of the Internet, social media, and the constant exchange of ideas across the globe, things may change for the better. With this burgeoning exchange of ideas, people could develop a better understanding of religion by digesting the information that could help them challenge the nonsensical claims force-fed to them under the pretense of religion. When eventually the true face of fanaticism and superstition is revealed, the exploitative tendencies and machinations of organized religion will be unveiled and will create a formidable challenge to its apologists. Thus far, the major religions have responded differently to such a challenge. Christianity has responded by modernizing, reviewing, and sometimes trimming some beliefs and practices that seem impractical in 21st century. Islam, on the other hand, has continued to foment extremism by breeding a new generation of younger fanatics who are ready to take any drastic actions, including killing themselves and slaughtering others, for the cause of Islam. Unfortunately for many, this tactic of intimidation based on asymmetrical information and adverse selection has primarily been successful so far. Consequently, I do not foresee a "lemon law" in regard to religion being enacted in countries like Iran in the near future.


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Reza Varjavand (Ph.D., University of Oklahoma) is associate professor of economics and finance at the Graham School of management, Saint Xavier University, of Chicago. He has been an avid participant in many professional organizations and active in (more...)
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