The Cult of Theoi: Economic Uncertainty and Religion

By Paul Frijters, University of Queensland and Juan D. Baron, Australian National University, Institute for the Study of Labour (IZA, Bonn)

We’re all familiar with our tendency to invoke divine intervention whenever we are faced with uncertainty. An important exam, a job interview, the illness of a loved one, is often the reason we rush to places of worship.

It’s also commonplace, at these times, to offer something as a sacrifice to the deity, as a kind of bargain. Frijters and Baron point out that sacrifices to please the gods occur in all religions—from the human sacrifices among Maya Indians to burning bits of beef in Greece.

Illustration: Jayachandran/Mint

To test their hypothesis, the researchers set up an experiment using students from the Queensland University of Technology. The students did not know each other and were taken from a variety of disciplines, to eliminate bias.

In the first phase of the experiment, a group of students played a game in which they were given 100 tokens which they are told would be convertible to money and then asked to play a game that aimed at accumulating these tokens. Everybody was left with some tokens at the end of the game.

The actual game is not important—the idea was simply to give the participants a sense of ownership about the tokens. It’s the second phase that’s important for the purposes of this paper.

This was how Frijters and Baron set up Phase two: “In Phase II (the sacrifice towards uncertainty), each individual was told that “Theoi", “the Market Maker", decides on the actual monetary value of the good earned in Phase I.

Participants were deliberately kept ignorant about Theoi’s decision rule and were simply told that the way Theoi decides is unknown. Participants were then given the option to contribute any number of units of the good between 0 and what they earned in Phase I to “Theoi". The final decision about what value to assign to each token was taken randomly.

The results are fascinating. What was immediately striking was the high level of sacrifice, with participants starting off by opting to sacrifice 50% of their tokens, almost as if they were sharing 50-50 with the unknown entity. But even after playing the game 20 times, players were still sacrificing a high 27% of their winnings.

The researchers then removed the uncertainty, giving a value of 1 to each token. This time the level of sacrifice in the last five periods (of the 20 games) was only 7.36%. In other words, under conditions of certainty, sacrifice reduces dramatically.

They next tested whether the uncertainty needed a human name to sustain sacrifices. Players were told that it wasn’t Theoi who made the decision about the value of the token, but that it depended on the weather. In this case, although the initial sacrifices were similar, they soon dropped off in subsequent games. That indicates labelling matters.

And finally it was found that even if people were given the opportunity to share their levels of sacrifice with others, it made no difference to the sacrifices made by people. In short, people didn’t learn from others.

What can be concluded from the experiment? Frijters and Baron write: “individuals sacrifice towards a source of economic uncertainty and that they sacrifice more when the uncertainty is higher and when it has a human name. Our interpretation is that, when faced with an incomprehensible phenomenon, individuals anthropomorphize the unknown."

Organized religion, in this view, has an intermediary role “between the innate wish for certainty and the ultimate suppliers (the reciprocal supernatural entities)".