Rivalry and externalities in secondary art markets

Summary As is the case with other field theories, Urban Economics, Environmental Economics, etc. the microeconomics of the arts attempts to derive a set of particular propositions from the general propositions of Economic Theory. In the process a substantial amount of cross-fertilization takes place. The specific characteristics of art markets require modification or amplification of some general propositions of economic theory, which in turn may offer novel and possibly useful insights as well as testable hypotheses. The following propositions appear to emanate from the present paper.In general markets R & D efforts are directed towards product or process innovation. For the most part, a known consumer technology exists. Innovation in art markets involves product creation as well as the creation of a consumer technology capable of deriving satisfaction from consumption of the new product. In open markets, a non-patentable product would entail excessive free ridership. Such a state of affairs may discourage innovation. Primary sellers would tend to adapt to narrowly changing consumer technologies. Such was the case during most of art history up to the late 19th century. At present, museums and art critics act as quasi patent offices, which fosters innovation by assuring a positive sum game.A new consumer technology is expected to be demand-augmenting. Not necessarily in the sence of McCain [12] where discontinuous jumps in demand are postulated. Even if such shifts were to occur in individual demand curves, market demand will nevertheless be continuous. The present model presumes that the augmentation is mostly due to increasing numbers of art buyers entering as the new consumer technology casues substitution of one style for another (or one fad for another). Syndicate behavior is induced by the winners of the race who have successfully established a new consumer technology and subsequently extend an umbrella over the membership. In this manner the spoils are shared more equitably. This is a peculiarly modern phenomenon. In the past one could not put a Teniers above a Rembrandt or a Polidoro above a Raphael. The generally accepted rules of decorativeness, that is, craftmanship and composition were obvious and immediately perceptible by all.In certain instances syndicate behavior favors single leadership by an established dealer, or a small group of dealers with a proven track record in spawning new technologies. Collectors, too, are involved, by overpaying for art. The discovering collector creates entry barriers for other collectors and thus has a monopoly of discovery of purely intellectual appeal art. Followers may opt to reduce their rivalry in exchange for assurances that once the new technology is in place, they will be given the opportunity to recycle the art brought into being by the leader or leaders. Under certain conditions, as analyzed in the foregoing, this constitutes an optimal strategy.As in the classical case, entry reduces investment and drives rents to zero, if each firm invests a roughly equivalent amount in support of the prevailing consumer technology. There arises the limiting case, equivalent to pure competition (see EQ. 10). On the other hand, several counterveiling strategies are possible. For example, overpayment, as in the case of Rothko. This limits the artists' output in the market. Leftover art is donated or acquired by museums. Such art is no longer competitive, as opposed to art held by other collectors, which, diminishes art'sscarcity value.The most probable outcome of a Cournot-Stackelberg type behavior is a succession of leader-follower or leader-recyler type syndicates, each successively dissolving as new consumer technologies replace old ones. It is, of course, possible for several specialized syndicates to operate contemporaneously. The rate of turnover clearly depends on the speed of dissemination of information. The curator, critic, trustee, consultant has a vested interest in episodic art and an spawning new consumer technologies: if this were not so, there would be no need for the pre-eminance of the critic. He is the magician, the priest, the medicine man who knows the secret language and penetrates the mysteries.     

Student Constructions of Fit: Narratives About Incongruence at a Faith-Based University

Decades of student persistence and retention literature has brought to light factors of social, academic, and religious fit that influence a student's decision to remain at or depart from an institution. At Christian institutions, increasing student pluralism raises the likelihood that students will not fit religiously. This qualitative study of 21 first-time, full-time students contributes to the existing literature by exploring how students who already feel they do not fit for religious reasons work at constructing a sense of fit at a Christian research university. Many participants coped with religious discontinuity by redefining specifically Christian practices and teachings in terms that were personally palatable: as either general moral lessons that would help them to be a better person or as cultural insights that would benefit them social and professionally in the future. In many cases, university staff were instrumental. Finally, participants worked to construct an acceptable level of fit, or fit threshold, through various combinations of social fit, academic fit, and religious fit, often compensating for one with others. As Christian institutions increasingly invite students from diverse religious backgrounds into their campus community, understanding ways that these students attempt to adapt to religious incongruence will be paramount.     

General Media,Minorities, and Research

Ronald G. Hick A Survey of Mass Communication (Gretna, La.: Pelican Publishing Co., 1977—$7.95, paper)

Everette E. Dennis The Media Society: Evidence About Mass Communication in America (Dubuque, Iowa: Wm. C. Brown, 1978—$6.95, paper)

Leslie J. Friedman Sex Role Stereotyping in the Mass Media: An Annotated Bibliography (New York: Garland Publishing, 1977—$25.00)

Maurine Beasley and Sheila Silver Women in Media: A Documentary Source Book (Women's Institute for Freedom of the Press, 3306 Ross Place, N.W., Washington, D.C. 20008—$5.95, paper)

Preben Sepstrup Consumption of Mass Communication: Construction of a Model on Information Consumption Behavior (Handelsvidenskabelig Boghandel, Fuglesangsalle 4, DK-8210 Aarhus V, Denmark—D. kr . 12, paper)

J. Michael Crabtree and Kenneth E. Moyer Bibliography of Aggresive Behavior: A Reader's Guide to the Research Literature (Alan R. Liss, Inc., 150 Fifth Ave., New York, N.Y. 10011—$35.00).

Marcia Guttentag and Shalom Saar, Evaluation Studies Review Annual, Volume 2: 1977 (Beverly Hills, Calif.: Sage Publications, 1977—$29.95)

Paul C. Cozby Methods in Behavioral Research (Palo Alto, Calif.: Mayfield Publishing, 1977—$6.95, paper)     

We Are All Librarians: Training in the Ever Evolving Information Commons

The University of Arizona Library opened its Information Commons in January of 2002. The University of Arizona Library developed an in-depth training program to ensure that the individuals staffing the Information Commons Reference Desk were able to support the varied and complex questions that can be asked in a resource and technology rich environment. In this article, the authors describe the development and evolution of the training program that was created at the University of Arizona and share examples of training documents.     

Are Multiple Art Markets Rational?

We advance and subsequently test the proposition thatmarkets for fine art are rational, namely, that, inthe determination of price, traders make use of allrelevant art historical and critical information, asrevealed by hedonic content analysis, as well as allinformation on authenticity of the works offered forsale. If true, the proposition has consequences forpublic policy. Museums optimize choices among art historicallysignificant authentic paintings distributed asstochastic rare events in the tertiary market for art. Such paintings have few, if any, art historicallyequivalent substitutes, causing the demand for suchworks of art to be extremely inelastic. Museums tendto buy at the top of the information curve; payingprices which exceed market averages for similar art. As a result, society pays the cost of institutionalrisk aversion. In contrast, collectors often purchaseart before all art historical information is complete,and often earn a reward for assuming a risk due toincomplete information (Singer, 1991; Pomerhene, 1994).Collectors who can borrow to accumulate the highestcategory art can consume the services of their artcollection at zero cost. Stochastic transferfunctions fitted to time series of sales volume at thetwo top international auction houses confirm thehypothesis that the highest category of art is a quasisubstitute for financial instruments (liquid wealth).