Cultivation of taste and bounded rationality: Some computer simulations

One can approach the economics of the arts, as any field of applied economics, in either of two ways. First, one can treat economic theory and econometric technique as subjects settled by specialists in those fields, to be used in the ec onomics of the arts as they are given, very much as if one were studying the demand for maize. Alternatively, one can treat the economics of the arts as a field which may need and suggest its own developments in theory and technique, suitable to its spec ial problems and processes, from which general economic theory and econometric theory might in principle learn something. Perhaps this latter view is implausible, given the high state of development of economic theory and econometrics in the modern liter ature. Yet many of the advances embodied in these fields have come from particular areas of application-and the economics of maize has been a particularly fertile field.I am indebted to participants in the Seventh International Conference on Cultural Economics, Fort Worth, Texas, October 1992; to p articipants in the Seminar on the Economics of the Arts, Venice, Italy, December 1992; to participants in the conference of the Pennsylvania Economists' Association, Wiles-Barre, PA, June, 1993; to participants in the second conference on Simulating Soci eties, Siena, Italy, July 1993; to participants in the conference of the Society for the Advancement of Behavioral Economics, Rensselaerville, NY, August 1993; and to participants in the Third Conference on Artificial Intelligence in Economics and Manage ment, Portland, OR, August 1993, for useful comments on topics related to the research reported in this paper. Errors and omissions are, of course, attributable to the author.