Contracts Between Art and Commerce
- (pp. 73-83)
AbstractContract structures used in the arts and entertainment industries are central to understanding their economic organization. The structures spring from common bedrock traits of these industries--pervasive product differentiation, all costs sunk, consumers' valuations unpredictable, artists having tastes for how creative work is done. Joint-venture structures are common, with revenue (not profit) shared. Advances to artists help bring incentive and distributive goals into consistency, as do long-term contracts covering successive cycles of the artist's output. Real option contracts allow the efficient allocation of decision rights in a project on which collaborators work successively.
CitationCaves, Richard, E. 2003. "Contracts Between Art and Commerce ." Journal of Economic Perspectives, 17 (2): 73-83. DOI: 10.1257/089533003765888430
- Z11 Cultural Economics: Economics of the Arts and Literature