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- Title
Perverse outcomes of intense competition in the popular arts and its implications for product quality.
- Authors
Frank, Joshua
- Abstract
A theoretical model is presented demonstrating how the quality of art output can fall when competition intensifies. When search costs are high, additional entries beyond a certain threshold are not reviewed, leading to no quality improvement from increasing the number of products in the pool of potential entries beyond this point. Furthermore, adding marginal quality products into the pool can dilute the quality of the pool. When firms have perfect judgment, the product selected is the best in the pool making dilution of the pool unimportant. However, when firms make large errors in judging the quality of entries, the quality of the selected product will fall when the average quality in the pool falls. A simulation model is utilized in addition to an analytical model to show likely outcomes with reasonable model parameters.
- Subjects
ECONOMIC competition; POPULAR culture; PRODUCT quality; CONSUMER goods; SIMULATION methods &; models
- Publication
Journal of Cultural Economics, 2008, Vol 32, Issue 3, p215
- ISSN
0885-2545
- Publication type
Article
- DOI
10.1007/s10824-008-9071-1