nep-cul New Economics Papers
on Cultural Economics
Issue of 2012‒01‒03
seven papers chosen by
Roberto Zanola
University Amedeo Avogadro

  1. Superstars and the Long Tail: The impact of technology on market structure in media industries By Weeds, Helen
  2. Newspaper vs. Online Advertising – Is There a Niche for Newspapers in Modern Advertising Markets? By Nadine Lindstädt; Oliver Budzinski
  3. The Market for Paintings in XVII Century Italy By Federico Etro; Laura Pagani; ;
  4. The Labor Market in the Seventeenth-Century Italian Art Sector By Federico Etro; Silvia Marchesi
  6. Digital Divide: From Computer Access to Online Activities – A Micro Data Analysis By Pierre Montagnier; Albrecht Wirthmann
  7. Assimilation in multilingual cities By Ortega, Javier

  1. By: Weeds, Helen
    Abstract: Technological change is transforming creative media industries. Digitisation lowers recording, storage, reproduction and distribution costs, while computer-based editing facilitates higher quality and special effects. With electronic distribution a vast range of content can be made available to consumers across global markets. The distribution of industry sales appears to be shifting: the late 20th century was the era of the 'hit parade' but attention has now shifted to the 'long tail'. This paper develops a model of differentiated products with endogenous quality and heterogeneous firms to examine the implications of technological change for product variety, quality, and the distribution of firms in media industries.
    Keywords: creative industries; digital media; long tail; superstars
    JEL: L11 L15 L82
    Date: 2011–12
  2. By: Nadine Lindstädt (Department of Environmental and Business Economics, University of Southern Denmark); Oliver Budzinski (Department of Environmental and Business Economics, University of Southern Denmark)
    Abstract: Newspapers have experienced declining circulation figures and declining advertising revenues for several years. In particular, declining advertising figures put a threat on newspapers – this is especially severe in the US where 73% of their revenues are generated through advertising. On the advertising side many companies have expanded their advertising expenditure towards online. Consequently, there are concerns about online advertising substituting newspaper advertising – in the same way as it has been feared for many years for the readership side. Both possible effects might put a threat on the further existence of (print) newspapers. However, though the internet – compared to newspapers – offers a variety of advantages for advertising companies, substitution tendencies cannot be generalized. In particular, we argue that newspaper advertising offers great benefits for the retailing industry. Consequently, we believe that retail advertising offers a niche for regional and local newspapers that can be expected to represent a sustainable segment of complementarity within the otherwise predominantly substitutional advertising markets. The paper substantiates this argument by applying the economic theory of advertising – in particular the differentiation between persuasive/complementary and informative advertising. The latter one presents the reason for retailers to continue advertising in newspapers. Subsequently, we conclude that no complete substitution between newspaper and online advertising can be expected to take place on the advertising side in the foreseeable future. The authors like to thank the participants of the EMMA-conference in Moscow (June 2011) and the members of the research group ‘Markets & Competition’ as well as Anna Lund Jepsen for helpful comments on an earlier version of this paper.
    Keywords: : Media economics, advertising, competition, complementation, substitution, online
    JEL: L82 A20 L13 M21
    Date: 2011–09
  3. By: Federico Etro (Department of Economics, University Of Venice Cà Foscari); Laura Pagani (Department of Economics, University Of Milan, Bicocca); ;
    Abstract: We study the XVII century market for figurative paintings in Italy, analyzing original contracts between patrons and artists: this is one of the first manufacturing markets for which econometric evidence of the basic laws of economics can be found. Size of paintings, expected quality, type of commissions and aggregate shocks affect prices as expected. We find evidence of contractual solutions to moral hazard problems in the patron-artist relation: since quality was not negotiable, prices were made conditional on correlated variables such as the number of figures depicted. We find evidence of price equalization between high and low demand destinations due to endogenous mobility of the painters (or the paintings). We also provide support for the Galenson hypothesis of a positive relation between age of experimental artists and quality as priced by the market.
    Keywords: Art market, Moral hazard, Endogenous market structures, Galenson hypothesis
    JEL: Z11 N0 D4
    Date: 2011
  4. By: Federico Etro; Silvia Marchesi
    Abstract: We analyze the labor market for painters in Baroque Rome using unique panel data on primary sales of still lifes, portraits, genre paintings, landscapes and figurative paintings. In line with the traditional artistic hierarchy of genres, average price differentials between them were high. We identify supply and demand factors related to prices of paintings. The panel dimension of the dataset and its matched painter-patron nature allows us to evaluate the extent to which price heterogeneity is related to unobservable characteristics of painters and patrons. We find that most of the inter-genre price differential is explained by the variation in average artist heterogeneity across genres. This suggests that the market allocated artists between artistic genres to the point of equalizing the marginal return of each genre. We also explain residual price differences in terms of efficiency wage, signalling and incentive mechanisms to induce effort in the production of artistic quality.
    Keywords: Art market, Occupational choice, Wage equalization, Signalling
    JEL: C23 D8 J3 Z11
    Date: 2011–11
  5. By: Franziska Krüger (Faculty of Economics and Management, Otto-von-Guericke University Magdeburg)
    Abstract: Literature indicates that culture influences consumers' expectations on a product or service, how they perceive performance, handle disconfirmation resulting from the comparison of expectations and perceived product or service performance, as well as their satisfaction. The study compares the confirmation/disconfirmation-paradigm between Chinese and U.S. American consumers. The influence of Hofstede's (2001) cultural dimension on disconfirmation and satisfaction is examined. The results show that the process of customer satisfaction differs across national borders. For U.S. American consumers the perceived performance has a stronger effect on satisfaction than for Chinese consumers. A direct influence of expectations on satisfaction can be observed only for Chinese consumers. Uncertainty avoidance and power distance influence customers' disconfirmation and satisfaction. The findings of the study contribute to current marketing literature and management practice in order to explain differences in cross-cultural consumer behaviour. The implications relate to the management of expectations, product development, and quality management.
    Date: 2011–12
  6. By: Pierre Montagnier; Albrecht Wirthmann
    Abstract: This study addresses issues of digital divide among households and individuals by using micro-data analysis of ICT usage patterns. The analysis includes data from 18 European countries, Korea and Canada. Inequalities in computer and Internet use are analysed in a two-step approach. First, the paper tries to better quantify and understand the factors that separate the ‘haves’ and the ‘have-nots’. Second, it tries to explain observed differences in the frequency and type of Internet use as a result of the socio-economic characteristics of households and individuals.
    Date: 2011–12–20
  7. By: Ortega, Javier
    Abstract: Using the Public Use Microdata Files of the 2001 and 2006 Canadian Censuses, we study the determinants of the assimilation of language minorities into the city majority language. We show that official minority members (i.e. francophones in English-speaking cities and anglophones in French-speaking cities) assimilate less than the "allophones" (the individuals with a mother tongue other than English or French), and that immigrants generally assimilate less than natives. In addition, the language composition of cities is shown to be an important determinant of assimilation both for allophones and for official minorities. Finally, we show that assimilation into French in French-majority cities is lower than assimilation into English in English-majority cities even when controlling for the language composition of the cities and including a rich set of language dummmies.
    Keywords: immigration; assimilation; language policies; minorities
    JEL: F22 J15
    Date: 2011–12

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