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The creative instability hypothesis

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Author Info

  • Peter Earl

    ()

  • Jason Potts

    ()

Abstract

This paper provides an analysis of why many ‘stars’ tend to fade away rather than enjoying ongoing branding advantages from their reputations. We propose a theory of market overshooting in creative industries that is based on Schumpeterian competition between producers to maintain the interest of boundedly rational fans. As creative producers compete by offering further artistic novelty, this escalation of product complexity eventually leads to overshooting. We propose this as a theory of endogenous cycles in the creative industries. Copyright Springer Science+Business Media New York 2013

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File URL: http://hdl.handle.net/10.1007/s10824-012-9174-6
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Bibliographic Info

Article provided by Springer in its journal Journal of Cultural Economics.

Volume (Year): 37 (2013)
Issue (Month): 2 (May)
Pages: 153-173

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Handle: RePEc:kap:jculte:v:37:y:2013:i:2:p:153-173

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Web page: http://www.springerlink.com/link.asp?id=100284

Related research

Keywords: Economics of creativity; Creative industries; Schumpeterian competition; Overshooting; D11; D21; Z11;

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References

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  1. Earl, Peter E. & Peng, Ti-Ching & Potts, Jason, 2007. "Decision-rule cascades and the dynamics of speculative bubbles," Journal of Economic Psychology, Elsevier, vol. 28(3), pages 351-364, June.
  2. Gary S. Becker & Kevin M. Murphy, 1986. "A Theory of Rational Addiction," University of Chicago - George G. Stigler Center for Study of Economy and State 41, Chicago - Center for Study of Economy and State.
  3. Adler, Moshe, 1985. "Stardom and Talent," American Economic Review, American Economic Association, vol. 75(1), pages 208-12, March.
  4. Stigler, George J & Becker, Gary S, 1977. "De Gustibus Non Est Disputandum," American Economic Review, American Economic Association, vol. 67(2), pages 76-90, March.
  5. Paulo Brito & Carlos Barros, 2005. "Learning-by-Consuming and the Dynamics of the Demand and Prices of Cultural Goods," Journal of Cultural Economics, Springer, vol. 29(2), pages 83-106, May.
  6. Daniel John Zizzo, 2003. "Empirical evidence on interdependent preferences: nature or nurture?," Cambridge Journal of Economics, Oxford University Press, vol. 27(6), pages 867-880, November.
  7. Throsby, David, 1994. "The Production and Consumption of the Arts: A View of Cultural Economics," Journal of Economic Literature, American Economic Association, vol. 32(1), pages 1-29, March.
  8. Magee, Gary B., 2005. "Rethinking invention: cognition and the economics of technological creativity," Journal of Economic Behavior & Organization, Elsevier, vol. 57(1), pages 29-48, May.
  9. A. Norman & A. Ahmed & J. Chou & A. Dalal & K. Fortson & M. Jindal & C. Kurz & H. Lee & K. Payne & R. Rando & K. Sheppard & E. Sublett & J. Sussman & I. White, 2004. "On the Computational Complexity of Consumer Decision Rules," Computational Economics, Society for Computational Economics, vol. 23(2), pages 173-192, 03.
  10. Rosen, Sherwin, 1981. "The Economics of Superstars," American Economic Review, American Economic Association, vol. 71(5), pages 845-58, December.
  11. Earl, Peter E., 2001. "Simon's travel theorem and the demand for live music," Journal of Economic Psychology, Elsevier, vol. 22(3), pages 335-358, June.
  12. Peter E. Earl & Jason Potts, 2004. "The market for preferences," Cambridge Journal of Economics, Oxford University Press, vol. 28(4), pages 619-633, July.
  13. Donata Favaro & Carlofilippo Frateschi, 2007. "A discrete choice model of consumption of cultural goods: the case of music," Journal of Cultural Economics, Springer, vol. 31(3), pages 205-234, September.
  14. Scitovsky, Tibor, 1981. "The Desire for Excitement in Modern Society," Kyklos, Wiley Blackwell, vol. 34(1), pages 3-13.
  15. Lanham, Richard A., 2006. "The Economics of Attention," University of Chicago Press Economics Books, University of Chicago Press, edition 1, number 9780226468822.
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Cited by:
  1. Berg, Nathan, 2014. "Success from satisficing and imitation: Entrepreneurs' location choice and implications of heuristics for local economic development," Journal of Business Research, Elsevier, vol. 67(8), pages 1700-1709.

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