Creative Industries and Economic Evolution

Creative Industries and Economic Evolution

New Horizons in Institutional and Evolutionary Economics series

Jason Potts

The creative industries are key drivers of modern economies. While economic analysis has traditionally advanced a market-failure model of arts and culture, this book argues for an evolutionary market dynamics or innovation-based approach. The book explores theoretical and conceptual aspects of an evolutionary economic approach to the study of the creative economy. Topics include creative businesses and labour markets, social networks, innovation processes and systems, institutions, and the role of creative industries in market dynamics and economic growth.

Chapter 14: Novelty Bundling Markets

Jason Potts

Subjects: economics and finance, evolutionary economics

Extract

14.1 CHOICE UNDER ABUNDANT NOVELTY: A SERIOUS CONSUMER PROBLEM The problem of consumer choice over novelty is not often taken seriously – as if, for example, it were somehow a generalization of the problem of how very rich people choose new yachts. Yacht choice among rich people is of course a serious economic problem for the dedicated microeconomist, involving all manner of uncertainties and signalling challenges. But what I want to examine here is the broader problem of how any person chooses amongst novel consumer goods in a context of abundant novelty in a social context, and with the market institutions that facilitate that choice. My hypothesis in this chapter points to the intermediating role of what I call ‘novelty bundling markets’ as emergent market forms that intermediate novelty choice and adoption as key institutions of a creative economy. Choice under abundant novelty in social contexts is a much underexamined aspect of modern economics that affects a lot more people than those choosing new yachts; for one, it affects those engaging in choice in the output of the creative industries, which is most of us (see also Karpik 2010). My argument here is that we may make sense of this evolutionary process via the construct of novelty bundling markets as emergent market forms that intermediate the production and consumption of novelty and which evolve from consumer specialization turned professional. Our starting point is that the economics of choice over new goods or novelty consumption remains a surprisingly sparse domain of economic...

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