Last week, I was very pleasantly surprised to be awarded one
of the two David Estabrook Romine Prizes awarded each year by Columbia’s
Department of Economics. I was lucky to receive this Prize for writing the best
paper in an undergraduate Senior Seminar for the academic year 2014-2015. It
thus seemed fitting that I take this week to write about my paper and how it
relates to my future research and academic goals.
The paper I wrote was titled “Location Models in the Art
Market—Artists as Firms Visualized on a Product Space”. The primary motivating
question was: How do artists choose their “product”—be that any number of
characteristics that define the artist as a firm and that define her work? In
my paper, I developed a framework to visualize an artist's set of works on a product
space, defined and constructed by measuring the degree of stylistic similarity
of each artist with every other artist on the space.
My interest in this topic arose from a desire to apply an
Industrial Organization lens to the art market. Inspired by discussions in
Prof. Prajit Dutta’s Economics of the Arts seminar about the nature of creative
work and how we can use Economics to study art, I wanted to explore the deeper
question of how artists choose what to make of their artistic product: in
short, how to position themselves in the product space of artists.
Most work in Economic literature however focused on more
traditional ideas of labor supply, and at most, focused on the optimization
decision behind how much “creative effort” an artist decides to allocate to the
production of one particular piece of art (to summarize the literature,
understanding that artists are motivated both by their artistic pursuits and by
their need for survival, economists had been looking at how an artist balanced
two competing tensions: the commercial and the artistic value of her work).
I wondered, however, how artists decided to create their
product when locating themselves in a much larger universe of past and present
artists. How do artists essentially differentiate their product (if at all) by
observing both the set of artists that are in the art market at the same time as
them, and the ones that have been in it and shaped it in the past? I thus had the idea of
extending a location model to the world of art.
Location models (the most famous of which is perhaps
Hotelling’s Linear City) study horizontally differentiated products and how
each product’s “location” on a product space (which can be one, two, three, or
even higher-dimensional) in relation to certain characteristics affects the
profits each product’s corresponding firm makes. These models thus have wide
implications for how firms design their products, based on consumer preferences
for the characteristics and attributes that define the axes of the product
space, “transport costs” (the costs consumers face from “moving” to another
part of the product space because their “ideal” product (as represented by a
point on the product space) is not being offered), etc.
My idea was then: how will an artist, viewed essentially as
the primary “firm” of the art market (and viewing galleries, auction houses,
etc. as “secondary” firms that rely on the work of the artist), choose her
location on the product space? Moreover, in the world of art, would maximal or minimal product differentiation apply (meaning, would an artist
earn higher profits by being as distant as possible from other artists in the
product space (meaning she has a very unique body of work), or being as close as possible to other artists (her
work is located on a “crowded” portion of the product space, which we could
interpret as more “popular” forms of art))? What even defines profits in the
art market (success and achieved eminence, actual monetary compensation)? In
short, what motivates an artist’s body of work? What informs the way an art
piece looks—the attributes (like color, medium, size, etc.) the creator
chooses for it?
As it turns out, in trying to put the idea of an artistic
product space in practice, I stumbled upon the perhaps not-so-surprising role
of influence in art. Because
categorizing an artist’s body of work based on characteristics can be rather
difficult (let alone the issue of reducing an artist’s work into one single
point on a product space, which brings us closer to philosophical questions on
the transcendence of art), I opted to use a somewhat indirect methodology to
construct my sample product space: I decided to calculate the degree of
correlation between the mentions of artists’ names in books over the last 145 years,
as measured by Google ngrams. Assuming that a higher degree of correlation
implied stylistic similarity between two artists, I then plotted a product
space by selecting artists to represent each axis. This is of course rather
limiting, since the interpretation of this kind of product space is
essentially—if Picasso is one of the axes—the degree of “Picasso-ness” of an
artist’s work. In short, how much like Picasso
is artist X?
A portion of the correlation matrix.
I then calculated several measures of the degree of influence
of an artist on the product design of a present
artist (measured by first calculating the average correlation of an artist
with every other artist in the product space). This led to some rather
intuitive empirical results: the greater the degree of “separation” between an
artist and the artists of today (meaning, the more in the past an artist has
died), the less of an influence she holds on the work of today. In short, 500
years from now, Picasso is likely not going to be seen as influential in the
world of art as he is considered today or in the 20th century.
Another result was the effect of lifespan: it turns out that the number of
years an artist lived (assuming it correlates with length of career) does not
actually impact the degree of influence of her work. Thus, a 90-year-old
Picasso can in theory have as much influence as a 28-year old Jean-Michel
Basquiat.
There were of course many potential limitations and critiques
of this framework (including its reliance on the Google ngram search engine,
the assumption that correlation implies stylistic similarity, and a
simplification of the factors that would make an artist (and those related to
her in style) more or less mentioned in books in a given year). Like many new
ideas, there are many potential improvements. Most importantly, however, there
are also many further questions that the idea provokes. In particular, I closed
by considering the implications and potential uses of this kind of framework:
- By visualizing the product space in different time periods, we can visualize and study the historical development of art movements and artists’ careers over time (how, where, and why do artists enter or move around the product space?)
- We can consider the question of innovation in the art market: do new, great ideas arise by a bold, new artist locating himself on an empty portion of the product space and being successful, or does it happen when an artist enters a crowded location but, through her skill and vision, manages to shift the location of other artists to new, unexplored and exciting locations? Does innovation, then, always have to be pure originality, or can it be slow and steady deviations away from the established Zeitgeist?
- We can empirically study maximal vs. minimal product differentiation in the art market: are artists more successful (be that in measures of achieved eminence or actual earnings) when entering a crowded location (which we can assume is clearly more popular forms of art, but also then much more competitive), or when they are bold, new and original, entering their own niche locations?
I really enjoyed writing this paper. It was exciting to conduct my own research, develop my own methodology, confirm intuitive results on the role of influence in the art market (a reassuring sign that my framework perhaps actually works), and most importantly, create a departure point for one of my main future interests: applying concepts of Industrial Organization to less traditional markets and industries. In particular, how can we think about artistic product design and differentiation more deeply? How can we think about an artist’s reasons for entry and exit in the market, etc.?
I hope, in the future, to consider some and many more of
these questions, understanding that there’s definitely a place for the fields
of Art History, Sociology, Psychology, and Economics, among many others, to
learn from each other and apply each field’s techniques and body of knowledge
to at least begin grasping at some of life’s deeper questions.
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