“Better an egg today than a hen tomorrow?” On the implications of deaccess policies on donations to museums
AbstractThe recent global crisis has forced many countries to a tight fiscal discipline. As a consequence, the cultural sectors in those countries have experienced severe budget cuts. In this context, disparate suggestions for additional sources of revenue available to public institutions have emerged. In particular, deaccessioning seems able to guarantee the sustainability of public cultural institutions without serious negative impacts on the fruition of cultural goods. This paper addresses the consequences that a widespread deaccessioning would have on private bequests to public institutions. We develop a sequential game with incomplete information between a Museum and a Donor. There are two types of museums: one type is committed not to sale its collection; the second type has no restriction on selling a share of its art endowment. The Donor does not know the type of Museum. The non-committed Museum can sale items in the first stage and/or in the third stage. Donors contribute only in the second stage. Therefore, deaccessioning triggers a moral hazard problem. We derive a number or results concerning the allocation of gifts and the decision of deaccessioning and provide numerical simulations to interpret the parameters. Most notably, with respect to a benchmark case where deaccessioning is illegal, contributions are reduced when the non-committed Museum deaccesses in the first stage (separating strategy). If, however, that Museum does not deaccess at the beginning (pooling strategy), also the committed Museum receives less than in the benchmark case. Interestingly, an increase of public grants to Museums (of any type) allows the non-committed Museum to adopt a pooling strategy, causing a reduction of donations to the committed Museum. This result provides an intuition for the widespread resistance of museum directors to deaccessioning and for their efforts to enforce common and strict guidelines.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 39611.
Date of creation: 11 May 2012
Date of revision:
Deaccessioning; Museums financing policy; sequential game; moral hazard;
Find related papers by JEL classification:
- Z10 - Other Special Topics - - Cultural Economics - - - General
- D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
- Z11 - Other Special Topics - - Cultural Economics - - - Economics of the Arts and Literature
- C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
This paper has been announced in the following NEP Reports:
- NEP-ALL-2012-07-01 (All new papers)
- NEP-CTA-2012-07-01 (Contract Theory & Applications)
- NEP-CUL-2012-07-01 (Cultural Economics)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Towse,Ruth, 2010. "A Textbook of Cultural Economics," Cambridge Books, Cambridge University Press, number 9780521717021, December.
- Towse,Ruth, 2010. "A Textbook of Cultural Economics," Cambridge Books, Cambridge University Press, number 9780521888721, December.
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