When David Throsby undertook his first application of a Contingent Valuation Method to the Arts in 1983 he did it to discuss the assumption that the arts were a case of market failure. But what makes the Arts to an example of market failure and how far could this particular method of research be used to overcome it? Throughout this essay I will shortly summarize some of those aspects of market failure that can be applied to art markets emphasising the necessity to know the collective willingness to pay and willingness to accept of all parties involved in a particular market. On that general basis I shall discuss the Contingent Valuation Method (CVM) under the perspective of its usefulness to a policy decision maker, who is trying to prevent market failure from developing into governmental failure. I will point out, that CVM can provide a collective willingness to pay or willingness to accept as one of the main indicators for a failure within markets of the Arts in general. It is understood that applying the whole theory of market failure to the arts surely would go beyond the scope of this very essay. I therefore will concentrate on those aspects of market failure theory that may show the strengths and limitations of CVM and that may have an impact on public cultural policy.
Inhaltsverzeichnis (Table of Contents)
- Introduction
- General Theory of market failure
- Asymmetric information within the Arts
- Uncertainty and Adverse selection within the Arts
- Public goods: Positive extern effects
- Welfare Economics: Why and when should the government intervene?
- The Contingent Valuation Method
- Contingent Valuation Method and "The New Political Economy"
- Literature Overview
Zielsetzung und Themenschwerpunkte (Objectives and Key Themes)
This essay examines the application of the Contingent Valuation Method (CVM) to the arts, specifically focusing on its potential to address market failure in this sector. It explores the theoretical framework of market failure and how it applies to the arts, emphasizing the importance of understanding the collective willingness to pay and willingness to accept among market participants. The essay then delves into the CVM, its strengths and limitations, and its potential contribution to public cultural policy.
- Market failure in the arts
- Asymmetric information and its impact on art markets
- The Contingent Valuation Method as a tool for assessing willingness to pay and willingness to accept
- The potential of CVM to inform public cultural policy
- The relationship between CVM and "The New Political Economy"
Zusammenfassung der Kapitel (Chapter Summaries)
- Introduction: This chapter provides a brief overview of the essay's objectives and introduces the concept of market failure, particularly as it relates to the arts. It emphasizes the importance of understanding the collective willingness to pay and willingness to accept in addressing market failure.
- General Theory of market failure: This chapter delves into the theoretical framework of market failure, outlining the conditions for a perfectly competitive market and highlighting the role of information asymmetry in creating market instability.
- Asymmetric information within the Arts: This chapter explores how asymmetric information affects decision-making in the arts, emphasizing the importance of access to complete and timely information for both buyers and sellers.
Schlüsselwörter (Keywords)
The key terms and concepts explored in this essay include: market failure, asymmetric information, Contingent Valuation Method (CVM), willingness to pay, willingness to accept, public cultural policy, "The New Political Economy", and the arts.
- Quote paper
- Friedrich Ansgar Drywa (Author), 2008, The Contingent Valuation Method as a policy instrument, Munich, GRIN Verlag, https://www.grin.com/document/166570
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