The buy-out/property right share choice in film financing: Financial rationing,adverse selection and the bayesian dilemma

Reduced state support of film financing in Europe requires the creation of an efficient market of private cinema financiers. Principal-agent models with and without common consent over film risk show that the two main problems of film financing (high risk and lack of collateral for the borrower) may be solved if the financier achieves economies of scale in costs of capital and is efficient in information gathering. Conversely, the pathology of a market with inefficient financiers includes: film financial rationing, adverse selection, and refusal of financial support to otherwise profitable film projects. From the normative point of view, the creation of efficient financiers would be fostered by institutional changes that promote market thickening and risk spreading (the case of the USA) instead of simple forms of risk shifting (the case of Italy).     

Internal bolshevisation? Elite social science training in stalinist Poland

Conclusion From the viewpoint of its Stalinist-era creators, the IKKN/INS could at best be described as a mixed success. Despite heroic efforts, it failed to train the cadres that might have permeated Polish scholarship with Marxism-Leninism. If it was the major channel for transmitting Soviet experience to Polish academia, then Poland's universities would not learn to be Soviet—the Polish historian Jerzy Halbersztadt has made the point that the institute was the only direct conduit of Soviet experience into Polish academic life. It even had a major role in educating some of Poland's most famous critical thinkers, although they, unlike their master Adam Schaff, seem less fond of reminiscing about the institute. Leszek Koakowski writes that he does not regard his role in the ideological struggles of the early 1950s as a source of pride.⁹⁰ The legacy of the IKKN/INS has also been a mixed one. It was not only a foundry of revisionists. For every future critical thinker of world repute, it graduated several cadres who served the PZPR loyally over decades. Adam Schaff recognises this dual legacy. Looking back on a long and active life, he has called the institute a pearl in my crown.⁹¹ Its members filled top party and government posts throughout the history of People's Poland. Andrzej Werblan served as Central Committee secretary and a member of the Politburo, Sylwester Zawadzki became minister of justice, Stanisaw Wroski was minister of culture, Mieczysaw Jagielski was the Politburo member who negotiated the Gdask accords, Stanisaw Kania succeeded Edward Gierek, and Mieczysaw Rakowski acted as General Jaruzelski's Party First Secretary.⁹² Undoubtedly much of the institute's strange course is to be attributed to the designs of Adam Schaff. Despite his Moscow training, Schaff retained an attachment to the Polish academic milieu which had formed him. He may have believed in Stalinist doctrine, but he also believed that this doctrine would show its superiority in competition with other views—even if the competition was far from a fair one. Of course, Schaff tried to retain ultimate control, and to play, as he now calls himself, the grey eminence. Nevertheless, his was a very unstalinist way of propagating Stalinism, and he must be given credit for helping to keep a spirit of intellectual inquiry alive in Poland during the dark years of the early 1950s.Yet Schaff tends to exaggerate his personal role in educating philosophers, dissidents and critical thinkers. This tendency is itself a legacy of the Stalinist period and its concentration of power. Stalinists view the present as their personal creation and therefore reject all criticisms of the past. At the final meeting of the Crooked Circle Club in 1962, Schaff encountered unwonted criticism from, among others, Andrzej Walicki. Schaff shot back at him: You are ours, you are our creation, a creation of socialism ... we educated you, and we didn't do such a bad job. But far from being a creation of Schaff's, the non-party member Walicki had been denied admission to graduate studies in philosophy. He felt relieved when those in attendance, who knew him better than Schaff did, burst out laughing.⁹³ The point is that the Polish intellectual world maintained its integrity outside the IKKN/INS, and in the end it was the institute which merged into the Polish intelligentsia, rather than the opposite. After 1957 the non-Marxist sociologists and philosophers made their way back to academia, and were joined by many former INS staff members. The basic unity of Polish social science training, and of the Polish intelligentsia, was restored.⁹⁴ Of course in a larger sense the fate of the IKKN/INS had little to do with the designs of its master. Schaff admits as much, proclaiming that I did this because I did not know what I was doing! If he had been asked to start such a project five years later, the answer would have been: No!⁹⁵ The fatal flaw of the Institute for Training Scientific Cadres was cadres: Poland did not have them. By 1956, Schaff and the party leadership, and perhaps Soviet advisers as well, had learned that one could not create an elite party scientific institution almost out of nothing. It would either be party or scientific, because apparatchiki could not become scientists, scientists would not become apparatchiki, and students could not produce teachers. In the Stalinist period, Polish intellectual life had stood in the shadow of the party; yet during the Thaw the relationship was reversed—increasingly the tiny party training institute was engulfed by the shadow of the resurgent Polish universities. Talented young people, even those in the party, made their way into the traditional higher educational establishment.The IKKN/INS did not, therefore, fail because of its own failings, nor succeed because of its own successes. It was a failed part of a failed whole. To succeed, mild revolution would have required decades, and Poland's Stalinists had only a few years. To make matters worse—or better, depending on viewpoint—they did not use these years in a conventional Stalinist manner. Under Schaff's guidance and at somewhat erratic Soviet bidding, the institute became an awkward series of half-measures, reminiscent of much of Polish Stalinism. When Poland's communists fell back and regrouped in 1956, the IKKN/INS occupied a lonely position they preferred to abandon.     

Languages,Genes, and Cultures

This paper examines three situations in which distances between languages, genes, and cultures matter. The first is concerned with the determinants that govern the learning of foreign languages. One of these is the difficulty of the foreign language, represented by the distance between the native and the foreign language. The second case deals with the formation and breaking-up of nations. Here, it is suggested that genetic distances between regions with diversified populations (such as between the Basque country and the rest of Spain) need to be compensated by more generous transfer systems if the nation wants to avoid secession-prone behavior. The last case looks at a very popular cultural event, the Eurovision Song Contest, in which nations are represented by singers who are ranked by an international jury that consists of citizens chosen in each participating country. It is shown that what is often considered as logrolling in voting behavior is rather generated by voting for culturally and linguistically close neighbors.     

Quality Judgements and Demand for French Public Theatre

Regression models often reveal a low statistical significance for the quality variables that are used to explain theatrical demand. I posit that opposing opinions on quality are the cause of this. A regression equation is constructed in order to explain demand, with continuous variables for price and volume, and with dummy variables for drama critics, directors-cum-managers, growth in funding by public authorities and repertoire classification. I use detailed data on demand for French theatrical institutions in 1995 and 1996 to test this model. To some extent, the results support the hypothesis that the media reputation of shows, as expressed in the form of drama reviews, and the artistic reputation of directors-cum-managers, which are listed on the programme, havean opposite effect on attendance. Nevertheless, the least squares coefficients show that the most reliable sign of quality remains the reputation of the theatrical institution.     

Optimal Pricing of Museum Admission

This paper examines the impact of free admission on museum revenue and evaluates the desirability, from an income maximizing perspective, of an additional free day. The model capitalizes on diverse audience composition. Regression analysis is used to estimate marginal shop and restaurant revenue for both art patrons and marginal consumers. Empirical estimation shows that an additional free day would not be profitable. A theoretical model which specifies crowding and museum recognition effects is provided as an appendix.     

Movie Stars and the Distribution of Financially Successful Films in the Motion Picture Industry

Audiences choose to see films using information from previous films. A stochastic consumer choice process based on this assumption generates a particular distribution of financially successful films among film types. Movie stars can be used to mark these successful film types. Thus, their star power originates not only from box-office appeal but also from marking power. Evidence of 960 top 20 films released in the United States and Canada between 1940–1955 and 1960–1995 is consistent with this model.     

Estimates, Bias and “No Sales” in Latin-American Art Auctions, 1977–1996

Estimate bias and no-sales are investigated in the context of Latin American Art auctions conducted in New York between 1977 and 1996. We find that, using a new method for calculating bias, both Sotheby's and Christie's overestimated art (oil-on-canvas pieces) by 2.7 percent. The inclusion of no-sales raises that proportion to a full one-third of the art traded. Utilizing a binomial probit analysis, moreover, we find that the estimate window is negatively and significantly related to the likelihood of a no sale at auction.     

Cultural entrepreneurship and the Banff Television Festival

Cultural entrepreneurship involves a conception, an initial launch, and a transition to an established event. Each stage generates wicked coordination and financial challenges. We explore this important process by examining the history of the Banff Television Festival, an annual event featuring a competition, workshops, and providing a forum for developing projects. The documentation indicates that the anticipated problems of nonprofit activities — inefficient administration, crude management systems, slow adaptation and little innovation — were not characteristic of the Banff experience. Well informed industry customers and patrons have established an environment which generally encouraged managerial competence and creativity. This benign result may not generalize to other cultural initiatives, in particular to those that serve the public directly and draw patronage from diverse sources.The paper was presented at the 9th international conference of the Association for Cultural Economics, held in Boston, May 8–11, 1996.     

II President's statement on the “Recruitment and Retention of Minority Group Members on the Faculty at Yale”

Reports and Documents

II President's statement on the Recruitment and Retention of Minority Group Members on the Faculty at YalePresident's statement on the recruitment and retention of minority group members on the faculty at YALE     

Charging for Admission to Museums and Galleries: A Framework for Analysing the Impact on Access

The Labour Government recently stated that access is a cornerstone of all its cultural policies, including those for museums and galleries. This paper therefore outlines a robust paradigm by means of which the impact of admission charges on access can be analysed. In applying that paradigm to museums, it demonstrates a number of analytical and theoretical red herrings which serve only to confuse a study of charges, including the zero marginal cost argument for free admission. Unless it uses this framework, the Government cannot be sure that it has secured access for the many instead of the few.     

Perfect reproductions of works of art: Substitutes or heresy?

The paper attempts an empirical investigation into a number of subjective determinants used in the evaluation of a work of art. Individuals' decisions to buy works of art seem based predominantly on aesthetic benefits. This is true for original pieces of art as well as for reproductions, i.e. there seems to be some substitutability between both kinds of objects. Major differences in the evaluation of originals and reproductions arise with respect to the secondary characteristics of art objects, not specifically with regard to the work of art itself. With respect to the willingness to pay (wtp) for a reproduction, a major impact seems to be whether or not the original work exists, i.e. a rationing effect seems to arise. The wtp for a reproduction also seems to depend on whether or not an individual earns his/her income in the arts sector.     

The progress of “affirmative action”: Yale declares itself

Reports and Documents

The progress of affirmative action: Yale declares itself     

On the construction of property rights in aesthetic ideas

The paper attempts to formulate concrete proposals for a change in laws of intellectual property, based on a communication-oriented theoretical analysis of the issue. The particular role of collection societies is investigated. The proposals arrived at suggest a strengthening of non-negotiable, non-hereditary authors' rights, and a refinancing fee collected for copies of works of art with classical status and distributed to members of currently active art circles.     

Can a basic income cure Baumol's disease?

In this paper we investigate how a universal and unconditionally guaranteed Basic Income, financed by a higher tax rate on income, can help to remedy, among other things, the so-called Baumol disease concerning the production of the arts, on the one hand, as well as the problems, raised in the Linder Theorem with regard to the consumption of arts and culture, on the other hand. Using a neo-classical time allocation model, we show that a basic income system increases the output of both the formal and informal production of the arts, and promotes the consumption of arts by lowering the shadow price of time.     

The universities between their internal and external enemies: II

See alsoThe Universities Between Their Internal and External Enemies, Discussion,Minerva, XXXII (Summer 1994), pp. 186–221.     

An economic model of artistic behavior

Conclusion What we have accomplished is to provide a framework in which artists are seen as economic individuals who base decisions on the same set of factors as nonartists. We are uncomfortable with the notion that artists are a special breed who are not responsive to economic incentives. We are also uncomfortable with the notion that nonartists could never be artists. However, the model as presented does allow for the possibility that an artist will incorrectly estimate the worth of his or her works, and continue to pursue an artistic career. It also allows for the possibility that some nonartists may also make the wrong choice and pursue a nonartistic career instead of an artistic one.     

The economic impact of intellectual property rights: An overview and guide

This paper, adapted from a conference presentation in Venice, links the history of intellectual property protection to two important trends in this field: (1) the shifting baseline, from a presumption of no property rights and open competition, to the presumption that all intellectual effort deserves the award of a property right; and (2) growing awareness of the political economy of these rights, which legislators can create and strengthen with little direct effect on government budgets. The paper also considers a shift in the scholarly emphasis, from the brand question of the overall worth of intellectual property to defailed consideration of individual doctrines and rules.     

The Rockefeller Foundation and German physics under national socialism

Conclusion Why did the Rockefeller Foundation think that it had to redeem its pledge of 1930 after the drastic political changes had occurred in Germany? It is my impression that the foundation was forced reluctantly to do so. There had, of course, been a resolution passed by the trustees in 1930 to vote the funds. This did constitute an obligation for the foundation which its trustees and officers were reluctant to disavow. It would probably have preferred that Planck could not meet the conditions set forth by the foundation. If this had occurred, it could have avoided the onus of failure to meet an obligation undertaken in 1930 and could then have also avoided providing support, even if only indirectly, for National Socialist Germany. When faced with the alternatives of withdrawal or payment of the grant, most of the officers preferred to delay action. Max Mason, on the other hand, had promised Planck that the grant would be made, despite the delay.Increasingly, after 1933, the Rockefeller Foundation spent more time dealing with requests for refugee scientists than with the support of scientific work in Germany. The dismissal of foundation-supported assistants on racial grounds had angered some members of the foundation.When the Rockefeller Foundation was chartered in New York in 1913 it declared that its objective was the well-being of mankind throughout the world. That remained its aim, but a fanatical nationalism made it impossible for the foundation to pursue an internationalist policy in a country with a regime entirely antithetical to that ideal.     

On justifying the different claims to academic freedom

Conclusion Academic freedom is thus a complex ideal, and I have argued that in many respects it has a more limited application than some of its protagonists seem to believe. Many of the arguments for it, moreover, are not peculiar to academics and universities. We would therefore be well advised to take seriously Eric James' injunction to think less of universities as having rights to additional and peculiar liberties, and to regard them more as places where the essential liberties of a civilised state find strongest champions, champions, moreover, who by reason of the intellectual strength which they possess, and the intellectual integrity which they defend, have a particular responsibility.³⁶ But it is beyond rational doubt that the continuation of civilised states as civilised depends on the maintenance of, among other things, academic freedom, and particularly of what I have called scholarly freedom.     

Do People Really Care About the Arts for Future Generations?

Many people argue that public art contains an element of bequest value: value derived by people today from the expected enjoyment of the art by future generations. In this paper, I investigate the existence of this claimed benefit. I employ an intergenerational model of the benefits from government subsidies and private charitable gifts to the arts, and fit it empirically using 1996 US General Social Survey data. The data analysis suggests that people take their life expectancies into account to some extent when giving to the arts or supporting government arts spending. Indeed, we cannot reject the hypothesis that people do not consider future generations in their current support for the arts.