nep-cul New Economics Papers
on Cultural Economics
Issue of 2015‒09‒05
four papers chosen by
Roberto Zanola
Università degli Studi del Piemonte Orientale “Amedeo Avogadro”

  1. Digitization of heritage collections as indicator of innovation By Borowiecki, Karol J.; Navarrete, Trilce
  2. Making Money by Giving It for Free: Radiohead's Pre-release Strategy for In Rainbows By Bourreau, Marc; Dogan, Pinar; Hong, Sounman
  3. Culture, Politics, and Development By Woolcock, Michael
  4. The Welfare Effects of Endogenous Quality Choice in Cable Television Markets By Crawford, Gregory S.; Shcherbakov, Oleksandr; Shum, Matthew

  1. By: Borowiecki, Karol J. (Department of Business and Economics); Navarrete, Trilce (Department of Business and Economics)
    Abstract: Heritage institutions house cultural and research content, which is the key source to stimulate innovation. Despite the potential, heritage collections are mostly inaccessible via digital mediums. We analyze the macro, meso and micro conditions of heritage organizations across Europe to identify the key determinants that foster innovation as reflected by the share of collection digitization and online publication. We find that organizations respond positively to an environment of high consumer digital literacy and sustainable resource allocation that enables slack, skilled staff and long-term strategic planning. Innovation is thus, in fact, enhanced by digital literacy from both producers as well as consumers.
    Keywords: Innovation; digitization; heritage collections; cultural institution
    JEL: O31 Z10
    Date: 2015–09–01
  2. By: Bourreau, Marc (Telecom ParisTech and CREST-LEI, Paris); Dogan, Pinar (Harvard University); Hong, Sounman (Yonsei University)
    Abstract: In 2007 a prominent British alternative-rock band, Radiohead, pre-released its album In Rainbows online, and asked their fans to "pick-their-own-price" (PYOP) for the digital download. The offer was available for three months, after which the band released and commercialized the album, both digitally and in CD. In this paper, we use weekly music sales data in the US between 2004-2012 to examine the effect of Radiohead's unorthodox strategy on the band's album sales. We find that Radiohead's PYOP offer had no effect on the subsequent CD sales. Interestingly, it yielded higher digital album sales compared to a traditional release. Our findings suggest the PYOP strategy generated higher sales revenues overall, even if one assumes no revenues were obtained directly from the PYOP channel. However, this "success story" does not readily apply to similar strategies adopted by other bands. We show that Nine Inch Nail's free provision of its new album, The Slip, resulted in lower revenues from the album's digital sales.
    JEL: L82
    Date: 2014–07
  3. By: Woolcock, Michael (Harvard University)
    Abstract: Whether in the domains of scholarship or practice, important advances have been made in recent years in our understanding of how culture, politics, and development interact. Today's leading theorists of culture and development represent a fourth distinctive perspective vis-a-vis their predecessors, one that seeks to provide an empirically grounded, mechanisms-based account of how symbols, frames, identities, and narratives are deployed as part of a broader repertoire of cultural "tools" connecting structure and agency. A central virtue of this approach is less the broad policy prescriptions to which it gives rise--indeed, to offer such prescriptions would be something of a contradiction in terms--than the emphasis it places on making intensive and extensive commitments to engaging with the idiosyncrasies of local contexts. Deep knowledge of contextual realities can contribute constructively to development policy by enabling careful intra-country comparisons to be made of the conditions under which variable responses to otherwise similar problems emerge. Such knowledge is also important for discerning the generalizability (or "external validity") of claims regarding the efficacy of development interventions, especially those overtly engaging with social, legal, and political issues.
    JEL: Z13
    Date: 2014–09
  4. By: Crawford, Gregory S.; Shcherbakov, Oleksandr; Shum, Matthew
    Abstract: We measure the welfare consequences of endogenous quality choice in imperfectly competitive markets. We introduce the concept of a "quality markup" and measure the relative welfare consequences of market power over price and quality. For U.S. paid-television markets during 1997-2006, we find that not only are cable monopolists' prices 33% to 74% higher than marginal costs, but qualities are also 23% to 55% higher than socially optimal and the welfare costs of each are similar in magnitude. Such evidence for "quality inflation" by monopolists is at odds with classic results in the literature.
    Keywords: cable television; endogenous quality; imperfect competition; industrial organization; monopoly; pay television; quality markup; welfare
    JEL: C51 L13 L15 L82 L96
    Date: 2015–08

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