nep-cul New Economics Papers
on Cultural Economics
Issue of 2017‒10‒22
three papers chosen by
Roberto Zanola
Università degli Studi del Piemonte Orientale

  1. Advertising Competition in the Free-to-Air TV Broadcasting Industry By Marc Ivaldi; Jiekai Zhang
  2. The impact of color palettes on the prices of paintings By Elena Stepanova
  3. Dealer Networks in the World of Art By Dakshina Garfield De Silva; Marina Gertsberg; Georgia Kosmopoulou; Rachel Pownall

  1. By: Marc Ivaldi; Jiekai Zhang
    Abstract: This paper empirically investigates the advertising competition in the French broadcast television industry within a two-sided market framework. We use a unique dataset on the French broadcast television market including audience, prices, and quantities of advertising of twenty-one TV channels from March 2008 to December 2013. We specify a structural model of oligopoly competition and identify the shape and magnitude of the feedback loop between TV viewers and advertisers. We also implement a simple procedure to identify the conduct of firms on the market. We find that the nature of competition in the French TV advertising market is of the Cournot type. Further, we provide empirical evidence that the price-cost margin is not a good indicator of the market power of firms operating on two-sided markets. Finally, we provide a competition analysis. The counterfactual simulation suggests that the merger of advertising sales houses would not have significantly affected the equilibrium outcomes in this industry because of the strong network externalities between TV viewers and advertisers. These results provide a critical evaluation of the 2010 decision of the French competition authority to authorize the acquisition of two broadcast TV channels by a large media group under behavioral remedies.
    Keywords: advertising, competition, media, TV, two-sided market, market conduct
    JEL: D22 K21 L13 L22 L41 M37
    Date: 2017
  2. By: Elena Stepanova
    Abstract: We emphasize that color composition is an important characteristic of a painting. It impacts the auction price of a painting but it has never been considered in previous studies on art markets. By using Picasso's paintings and paintings of Color Field Abstract Expressionists sold in Chrisite's and Sotheby's auctions in New York between 1998 and 2016, we demonstrate the method to analyze color compositions: how to extract color palettes from a painting image and how to measure color characteristics. We propose two measures: 1) the surface occupied by specific colors, 2) color diversity of a painting composition. Controlling for all conventional painting and sale characteristics, our empirical results find significant evidence of contrastive paintings, i.e. paintings with high diversity of colors, carrying a premium than equivalent artworks which are performed in monochromatic style. In the case of Picasso's paintings, our econometric analysis shows that some colors are associated with high prices.
    Keywords: art markets, hedonic pricing, Picasso, Rothko, visual data, color, color quantizing
    Date: 2017–10–03
  3. By: Dakshina Garfield De Silva; Marina Gertsberg; Georgia Kosmopoulou; Rachel Pownall
    Abstract: We apply network theory to study auction outcomes in the fine art market. Using a unique historical data set, of London-based art auctions that took place between 1741 and 1913, we investigate the drivers of strategic network formation between dealers (buyers) and sellers and the effect of network structure on artwork prices and market exit. The network size and similarities in art specialization between trading partners strongly influence the decision to form links. A larger network and a higher degree of specialization exacerbate informational asymmetries across buyers leading to higher rents through lower prices and facilitate longer market presence.
    Keywords: Auctions, Art Dealers, Networks
    JEL: D44 D82 L14
    Date: 2017

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