Creativity is a hallmark of the arts and culture. This chapter presents in two sections studies on this important, albeit elusive and understudied, concept. The first section looks at the individual artist and outlines research that discloses the motivation for individual creativity and, especially, whether it is amenable to economic incentives. Related are studies on artists’ labour market, which have addressed artists’ supply decisions in respect of their time allocation to creative and other income-earning work. The second section summarizes work dealing with the important questions of whether it is possible to understand what influences creative output and how to encourage it. This includes an overview of recent contributions that have explored how creativity can be stimulated by an increased demand for innovation, whether the institutions of copyrights and property rights can foster creativity, and how specific extraordinary individuals make their discoveries and produce creative output owing to peer effects or emotional factors.
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