nep-cul New Economics Papers
on Cultural Economics
Issue of 2023‒01‒09
four papers chosen by
Roberto Zanola
Università degli Studi del Piemonte Orientale

  1. LIVE AND DIGITAL ENGAGEMENT WITH THE VISUAL ARTS By Victoria Ateca-Amestoy; Concetta Castiglione
  2. From Gurus to Geeks? The Role of Customer and Expert Ratings in a Hedonic Analysis of French Red Wine Prices By Stephen Bazen; Jean Marie Cardebat; Magalie Dubois
  3. Selection, Consumption, and New Music Exploration in an Online Social Network: A Dyadic Approach By Johannes Loh
  4. Economics of NFTs: The Value of Creator Royalties By Brett Hemenway Falk; Gerry Tsoukalas; Niuniu Zhang

  1. By: Victoria Ateca-Amestoy (Department of Fundamentos del Análisis Económico II, University of the Basque Country, Bilbao (Spain)); Concetta Castiglione (Department of Economics, Statistics and Finance 'Giovanni Anania', University of Calabria, Rende (Italy))
    Abstract: This work, using data from the USA 2012 Survey of Public Participation in the Arts, explores visual arts consumptions through both onsite attendance at museums and electronic and digital media. By estimating both multinomial logit and recursive bivariate probit models, direct and indirect effects for the alternative forms of digital participation are obtained. Results show that there is a trade-off between internet consumption and onsite visits. Visiting museums and art galleries has a positive impact on the digital access to visual arts, both through handheld and mobile devices and via the internet, whilst the same impact is not found for internet access on museum attendance.
    Keywords: Cultural participation, digital engagement, live and online museum visits, handheld or mobile devices, internet
    JEL: C55 D12 Z11
    Date: 2022–12
  2. By: Stephen Bazen; Jean Marie Cardebat (BSE - Bordeaux Sciences Economiques - UB - Université de Bordeaux - CNRS - Centre National de la Recherche Scientifique); Magalie Dubois
    Abstract: Wine is an experience good whose true quality can only be known by consuming it. This characteristic provides a rationale for recourse to experts who provide information on wine quality and reduce the information asymmetry for the consumer. Consumers may come to rely more on the comments and ratings of other consumers or peers, rather than those of experts (guides, specialized journals, personalities). This tendency has been observed in the hospitality (restaurants, hotels) and cultural (movies, novels) markets where popular applications exist and allow information to be collected from peers. We hypothesize that consumers' ratings will come to dominate expert ratings in the wine expertise market. We use the ratings posted by consumers on the Vivino online marketplace for 37, 960 French red wines. We employ a hedonic regression framework which includes the usual attributes of the wines as well as the ratings from both recognized experts and those of consumers on the Vivino platform. Average consumer ratings are found to have a larger effect on price than expert scores. These results are found to be robust to outliers and the general conclusion that peers matter more than experts holds when we exclude the top-end wines.
    Keywords: Hedonic analysis, Wine experts, Peer rating, Wine prices, Quality evaluation
    Date: 2022–12–09
  3. By: Johannes Loh
    Abstract: We study peer influence in an online social network on a platform where consumers purchase music albums. They can follow their peers and become informed about their consumption choices. In particular, we are interested in how this affects consumers’ exploration of new music that exhibits unfamiliar attributes (e.g. artist, genre, or instrumentation). Our empirical analysis contains two parts: First, we analyze how the formation of new dyads in the network depends on consumer-peer similarities in their preference for certain album attributes. This affects music exploration because it determines which peer purchases consumers are exposed to. Second, conditional on the determinants of dyad formation, we investigate how within-dyad information flows affect consumers’ purchase decisions, and in particular their exploration of unfamiliar attributes. Our analysis produces three key findings: First, preference similarities between consumers and peers are the strongest predictor of the formation of dyads. This likely stifles consumers’ exploration of new music because it limits their exposure to unfamiliar attributes. Second, we find a strong positive peer effect of consumers observing peer purchases after the formation of a dyad. Third, this effect is stronger for albums from unfamiliar artists, but weaker for those that exhibit unfamiliar horizontal attributes (e.g. its genre). Together, this suggests that new music exploration in online social networks is limited and subject to nuance.
    Keywords: online social networks, consumption choices, peer influence, music consumption
    JEL: D12 D83 L82 L86
    Date: 2022
  4. By: Brett Hemenway Falk; Gerry Tsoukalas; Niuniu Zhang
    Abstract: Non-Fungible Tokens (NFTs) promise to revolutionize how content creators (e.g., artists) price and sell their work. One core feature of NFTs is the option to embed creator royalties which earmark a percentage of future sale proceeds to creators, each time their NFTs change hands. As popular as this feature is in practice, its utility is often questioned because buyers, the argument goes, simply ``price it in at the time of purchase''. As intuitive as this argument sounds, it is incomplete. We find royalties can add value to creators in at least three distinct ways. (i) Risk sharing: when creators and buyers are risk sensitive, royalties can improve trade by splitting the risks associated with future price volatility; (ii) Dynamic pricing: in the presence of information asymmetry, royalties can extract more revenues from better-informed speculators over time, mimicking the benefits of ``dynamic pricing''; (iii) Price discrimination: when creators sell multi-unit NFT collections, royalties can better capture value from heterogeneous buyers. Our results suggest creator royalties play an important and sometimes overlooked role in the economics of NFTs.
    Date: 2022–12

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