Intellectual Property in the Art Market II

A few months ago I wrote about Richard Prince, who sold lightly edited screenshots of other people’s Instagram posts for upwards of $90,000 (this after decades of rephotographing and editing other people’s works).  In another bizarre copyright and fair use saga from a few years ago, British photographer David Slater found himself in dispute with Wikimedia over the granting of a copyright to a picture taken on Slater’s camera—but by a macaque.

While traveling in Indonesia, Slater set up his tripod and, by good fortune, a couple of macaques clicked the camera’s button to take “selfies.” These pictures made their way around the world as viral sensations, but were however not treated as copyrightable. Slater claimed that his pictures did not belong in Wikimedia Commons—a repository for media in the public domain—as he should hold the copyright for them. However, copyright law specified that non-human animals were not eligible to hold copyright, and that Slater did not partake in the creation of the photograph (he had stepped away from the camera when the macaques snapped their own pictures) and could thus not himself hold copyright either. In short, the law and the media determined that—because Slater did not himself click the camera’s button—copyright could be held neither by the macaques nor the photographer.

In order for Slater to have a legitimate claim to the work’s copyright, he would have had to make significant alterations to the image that would substantially change the composition of the work, and allow him to hold copyright over that edited product.

This, in comparison with Richard Prince’s screenshots, brings up interesting questions of intellectual property, once again in the context of art. Firstly, why are Prince’s incredibly light alterations of Instagram posts (at most, he added comments) allowed, while Slater must see his work fall immediately into the public domain? Why must Slater “substantially” alter the work’s composition in order to own copyright over the edited work, but Prince can get away simply adding comments to the bottom? In short, what is enough of an “alteration” to make a work new, valuable, and an “original” contribution that deems copyright protection?

Moreover, the law is not on Slater’s side presumably because—even though he set up the tripod and the equipment was entirely his—Slater did not himself press the camera’s button. Which then begs the question: for a medium such as photography, or film, who is the author of a particular work? After all then, while it is clear that a production studio owns the rights to a feature film, why doesn’t our treatment of Slater’s predicament imply that the person physically behind the camera owns the rights? Or the director who envisioned each shot? Or the screenwriters who created the plot and the dialogue (if any)?

To what extent does “originator of the idea” count when it comes to authorship? Is the owner of a copyright the hand that laid down the paint, or clicked the button, or moved the camera? Or is it the person whose idea it was to lay down that paint in such a fashion, or click the button at the particular scene? Should intent to create ever play a role? After all, the macaque was likely fooling around with a strange object that belonged to Slater—who clearly desired to capture a good shot.

The boundaries of art and concepts keep getting pushed further and further with time. Sadly, however, the boundaries of copyright protection and our definitions of authorship and originality do not extend as quickly. Why could Marcel Duchamp take a porcelain urinal, call it a fountain, and make an innovative and avant-garde piece of art? Does the act itself of naming constitute a valid reinterpretation of an object and—as such—an original work of art? If so, Slater’s take on a macaque’s snapshot of herself—after the photographer setting up the requisite equipment to do so—as a “selfie” might then be considered an original work of art in itself.

The Economy and Art Production

While this is not always necessarily true, we often attempt to interpret art by investigating the societal context in which it was created. Thus, what can the state of the economy or the society in which an artist lived tell us about the meaning or the aesthetic composition of an art piece? The resulting empirical question is, then, to what extent does the economy inform and translate into the quantity, quality, and content of artistic production? Moreover, how can that be tested?

The first variable (quantity of art) should be simple enough to study: simply run a regression of the quantity of art produced (represented by an index, factor, or instrument for artistic production, which in itself is perhaps no simple feat) on different economic measures. Of course, such a regression would have to be adequately controlled for potential endogeneity issues (for example, are the price level in an economy and the quantity of art produced jointly determined?), omitted variable biases, etc. With such a regression, we could uncover: do periods of economic crisis (i.e. recessions, stagflation, etc.) cause more or less art to be produced, either contemporaneously or with lags to the crisis? Does art production boom in times of prosperity? Moreover, do the relationships depend on the political and demographic makeup of societies (i.e. how do the coefficients change between democracies or authoritarian societies? Between younger and older nations in terms of their populations?).

Perhaps more importantly, how do the quality and the message content/ aesthetic composition of art pieces vary based on the economic situation? Meaning, do artworks generally reflect the times in which they were produced when those times are difficult, or more prosperous? Will an artist produce works portraying issues of economics or society, or portraying messages regarding economic situations when times are tough? A simple hypothesis—based perhaps on prospect theory—would argue that art reflects economic topics and messages when times are difficult, i.e. when the state of the economy is more salient and more impactful in the minds of the artists.

An unsophisticated way of studying this question would involve cataloguing art works in a systematic fashion by gathering information on their time and place of production, biographical information on the artist, and ultimately classifying them as revolving around a theme of the society or economic times. Then, a regression with a binary variable (“related to economics and society?”) would be run on economic variables.

An obvious difficulty, of course, is how to systematically classify works. After all, if during the Great Depression an artist had painted a scene of shantytowns or jobless lines, it might be simple to classify that as related to the economic situation. However, if an artist had instead painted a scene of prosperity and wealth, who’s to say that painting did not revolve around a yearning for better times, and thus also related to the economic situation of the times? Moreover, the classification of art pieces must be conducted independently from the information on the works. In order to avoid confirmation bias, the person classifying the relevance of an artwork to socioeconomic contexts must not be aware of that very same context. Lastly, how should abstract works be classified? How should pieces of art where only the implied message is economic in nature be classified, if art pieces themselves are often open to interpretation?

Of course, trying to systematically and objectively study a field that is inherently without constraints poses a multitude of problems. Yet, it could also be fruitful. After all, it could help answer questions like: should the government subsidize the arts based on patterns of production during different economic contexts? Should the government be involved in the arts at all? Should our interpretation of some works be informed further (or less) by the context in which they were created? In turn, should our interpretation of the objectives of an artist depend on his or her context as well?

The study of art can only be enriched by uncovering how it relates to economic and societal forces, which invariably shape and influence the hands and the minds that shape each work.

The Masterpiece Effect, and the Market Efficiency of Art

In the empirical research regarding returns from art investments, an interesting phenomenon has been observed called the masterpiece effect. Intuitively, if art pieces are indeed believed to be “masterpieces”—or works of exceptional quality or renown—then we might expect the returns to investing in these art pieces to uniformly outperform the general portfolio and market. However, James Pesando, Jianping Mei, and Michael Moses (among others) have found that masterpieces tend to underperform the market and, in fact, provide lower cumulative returns than non-masterpieces.

Many economists have contributed their thoughts to explain this phenomenon. For example, some believe it’s due to overbidding followed by mean reversion. Thus, masterpieces outperform in one period—we could theorize the one in which their “masterpiece” status was originated or consolidated—and then underperform once they’re more established and change hands less frequently (presumably, these pieces would be coveted and thus not traded as often). Others suggest that masterpieces are less risky because they’re more liquid—they may not trade as often, but are definitely easy enough to sell in the market when they do enter it.

I tend to sympathize with this second theory the most (though the first also has its merits and, in reality, probably explains some portions of this effect as well). It is elementary intuition in financial economics that lower risk involves lower returns. To that extent, non-masterpieces would provide higher returns because they’re indeed riskier than the established pieces of art. For these riskier assets, you can buy at a low price and, with luck, sell at a much higher price later given changing art tastes (meaning, you’re lucky to buy “speculatively”—buy an emerging or obscure artist’s work in the hope she will catch on in the art market—and then sell when your prediction has come true). Yet, of course, this comes at the high risk that this lesser-known work will not in fact sell, or will not “catch on”.

But, masterpieces should in theory always be considered eminent, and as such are less risky. Thus, you’d buy at a high price and, technically, expect to sell at a similarly high price. Their very definition of masterpieces, after all, means they’re tried and tested works. Because tastes regarding established works don’t change much (after all, that’s why they’re “established” parts of the art canon), the only factor affecting increases in prices for these pieces should be inflation, allowing perhaps for slight changes in the interest of the artists at a given time (which reduces the investing game to simply having a sense for when an artist is being paid more attention to).

Given the above discussion, the masterpiece effect almost becomes a market efficiency question, in that masterpieces could be considered assets that trade “efficiently”, while non-masterpieces may not. Applying the concept of an efficient security to artwork, because of their very status as masterpieces we can presume we know most if not all possibly available information about these works and their artists, so nothing new or material (despite, perhaps, deterioration of the work itself or discovery as a fake, etc.) should ever come out about that work of art. Thus, because prices for an asset that trades efficiently should only adjust to new, material, and public information, we should expect prices for masterpieces to change very little over time and thus, these works to provide very low (if not zero) returns.

Because we may lack much more information on non-masterpieces, and because there is a higher likelihood that some particular investors or participants in the art market receive more or better information on them than others (a specification falling more under the “strong” form of market efficiency as defined by Eugene Fama), non-masterpieces may thus show inaccurate prices and allow for outsized returns that deviate from their true value, as compared to masterpieces.

Ashenfelter and Graddy summarize James Pesando’s discussion of the market efficiency question: when pieces trade efficiently, “the market should internalize the favorable properties of masterpieces into their prices, so that risk‑adjusted returns should not exceed that of other pieces.” Of course, here Pesando explains the masterpiece effect without relying on the inefficiency of non-masterpieces. In fact, for Pesando, it is because the market is efficient for both masterpieces and non-masterpieces that the former do not demonstrate higher returns than the latter (for non-masterpieces, there's simply more "new" (presumably good) information about them coming to the market, so there is more positive price adjustment for newer, non-established works as opposed to masterpieces). I might claim that the masterpiece effect is observed perhaps because market efficiency breaks down for non-eminent pieces of art (again, we can think that assets that are traded very infrequently, that are paid comparatively little attention, and for which there exists sparse information, would trade inefficiently compared to those better-known assets, in the context of the art market).

Of course, this entire discussion relies on some critical questions: firstly, empirical research into this topic requires us to appropriately control for survivorship bias. After all, as mentioned above, masterpieces are presumably much more liquid than non-masterpieces. As such, they are likely to sell much more often so that, when we consider all the non-masterpieces that don’t “survive” in the art market, the cumulative returns of these non-masterpieces may ultimately be below that of the more reliable masterpieces, making the latter ultimately still the better investment.

Secondly and more philosophically (but with much relevance to econometric models), how do we even define masterpieces? The results of any models will ultimately rely on what works are defined as masterpieces, be it through a dummy or other methods.

Lastly, when does an art asset actually trade efficiently? How do we go about showing that an art piece or certain sectors of the art market trade in an efficient way? The “weak” form of efficiency is easy enough to think about: after all, a “weakly” efficient asset is one whose returns cannot be predicted using standard time series methods (in this form, the information set is only past historical prices of the asset).  In the "weak" form, asset prices follow a random walk and only respond non-randomly to new information. Stronger forms of efficiency, however, don’t extend as easily to the art market. Conceptually, showing “semi-strong” efficiency would require us proving that prices for these pieces respond as expected to new, material information about these pieces. Yet, an art piece by definition shouldn’t really change much. Thus, there should be very infrequent new information about the piece to move the price. In turn, how would we go about conducting an event study of an art piece’s returns?

This lastly brings us to the most philosophical question of them all: why do prices change so dramatically for artworks at all? Other than inflation, why would a Picasso 50 years from now sell at a much higher price than today? The most obvious answer would simply be changing consumer preferences: perhaps 50 years from now, Picasso is even more popular than he is today. Yet, how do we calculate when the popularity of an artist has changed? How do we define that popularity to then measure and apply to the art market equivalent of an event study? How, at the end of the day, do we know where art prices should adjust—what the true, accurate value of an artwork should be—when art itself can transcend all attempts at understanding?

Noon: Rest from Work (after Millet), Vincent van Gogh (1890)

The Value of Art

A common topic of interest in the field of arts economics is that of art as an investment.  For a great survey on issues regarding art prices, returns, and, in turn, investment potential, see “Art Auctions” by Orley Ashenfelter and Kathryn Graddy in the Handbook of Economics of Art and Culture.

Among the many things this article covers is the topic of finding the value of art (in terms of prices), with the end goal of considering art returns, and how the auction process informs price formation.

When we think about valuing a piece of art (in this case, finding the price one should pay for ownership of that work), we could think of it as we do more “traditional assets.”  Thus, we could think of “comparable” works that have been involved in “past transactions” that would allow us to get an estimate for the value of the piece in question. Alternatively, one can conduct a valuation for a piece inspired by a type of discounted cash flow method. In other words, one could evaluate the kind of “cash flows” one would obtain from a given painting (and here, “cash flow” can be abstracted heavily to “value” in general—both monetary, cultural, and otherwise) and the risk involved with owning that painting, essentially valuing the piece of art as the sum of the discounted value you’d obtain in future time periods from that work.

Now, thinking of art valuation less traditionally, one can think of what is known as a hedonic model. This model, very simply, regresses observed prices on characteristics of the respective works. In short, it would give coefficients on different features of a piece of work. In this case, one would preferably estimate different models for different mediums, since different characteristics can have different impacts on the value of a painting based on the type of work—one can imagine that a dark red color would have a much more positive impact on a painting than on a marble statue. In turn, simply adding a dummy variable for different mediums to a regression that encompasses different kinds of arts may not result in correct coefficients (we can also think about the impact this could have on the standard errors of these coefficients, if perhaps some mediums have more widely dispersed price observations for the same variables than other mediums).

The way that a hedonic model would be applied then (if these models were to be used predictively or prescriptively—which both philosophically and economically may involve some issues) would be to input the value of the variables for each work in consideration to output an estimated price for that work. In short, an appraiser would add up the sums of the “values” of each characteristic of the work to reach the piece’s final value.

Of course, a hedonic model based on panel data could be adapted to a fixed effects model in order to control for the different perceived values of “quality” of each painting. In theory, though, paintings with identical values of the dependent variables should, by the definition of this model, have identical “quality”, a question that brings us quickly to the more transcendent and literally “price”-less dimensions of art. After all, what defines “quality,” and shouldn’t by definition the coefficients of the model capture it by defining the “value” or quality of a work given its characteristics? Why are some paintings that are objectively similar to others worth much more (or treated as much more higher-quality) than others?

Alternatively, another regression model to value art would be the repeat-sales model, which is frequently used in another “alternative” asset class: real-estate. This model is perhaps better suited to construct indices of art prices overall, as opposed to valuing individual pieces of art. It controls for the mix of art products being considered (in short, the quality of the works of art in given times) by only considering works that have been sold more than once (an index that does not do this could perceive an increase in the “price of art” that is actually only capturing the entry of new, high-quality or fashionable pieces of art that, because of their quality, would be increasing the index).

Of course, an issue endemic to the repeat-sales model (and generally most regression models observing prices at sale) is that of survivorship bias: a model may be overestimating prices of art because it only observes those pieces that were in fact sold (meaning, those that have “survived” in the market). By definition, a model that only looks at sales would not be accounting for the multitude of art pieces that failed to sell, so coefficients would likely be overestimated given this bias.

And of course, an even broader issue with valuing art is the major philosophical question:  can we even put a price on art? Clearly, auction houses, galleries, dealers, and independent artists have been putting price tags on their work, and this is mostly for good reason. Artists (and the market around them) deserve to make a living off of their labor and the value they add to culture and society.  So, of course, art should never really be “free”: it always adds some value. However, art can in many occasions be “priceless.” And this is where the major issue arises: will art valuation ever truly systematically, consistently, and accurately capture all the value an art piece offers to the world? More deeply, how can we even calculate the value an artwork provides? Beauty (and I use this term very generally, to encompass all forms and styles of “beauty”, including the grotesque and ugly, the conceptual and the performative), after all, is in the eye of the beholder. What kind of factors should we include and, by attempting to run models and quantify values are we not imposing a norm on what actually “counts” to price a piece of art?

Why should we limit and define the characteristics that have value to us humans when, often, art is transcendental and beyond the features we can visually discern (or perceive with different senses)? And who’s to say our calculated values should apply to all (or on that note, any) piece of art? That a blue is worth more than a red? Or a larger frame more than a smaller canvas? That a painting’s exposition in the Met or its more prestigious provenance or artist makes it a more “valuable” painting than the one by your grandfather, sitting over the mantle at home? These and many questions, like art itself, are perhaps beyond the limiting interpretations and assumptions of the human mind.

Intellectual Property in the Art Market

At this year’s Frieze Art Fair in May, Richard Prince sold unaltered screenshots of others’ Instagram pictures (without permission) for upwards of $90,000 each. His contribution?: some obscure, Instagram comments on the bottom of each screenshot from what appears to be an account he owns: richardprince1234. After a private exhibition at Gagosian earlier in September of 2014 that gave way to much criticism, Prince had the art market once again debating issues of authorship, authenticity, and originality.

This occasion joins many other instances where the line between artist and seller is incredibly blurred and contested. After all, whom does art belong to? Who transforms an ordinary object—such as Warhol’s soup cans, or Duchamp’s “Fountain”—into a piece of art? And then, who can lay claim to the authorship of that work and, even further, sell that piece of art to others (let alone at exorbitant prices)?

Like many other, more “traditional” products, art can be studied from the perspective of value added. After all, no one protests that the final products we purchase on retail go through what is usually a long, complex supply chain where subsequent producers, dealers, wholesalers, etc. add a feature, a service or a physical transformation to the intermediate good they acquired, to then sell on to the next producer in the chain and, eventually, the end-consumer. Yet, nobody protests because this is both established practice and, most importantly, an arguably fair practice. The intermediate producer gets paid by the supplier further downstream for the service he performed on the product. Leaving aside those strategies frequently studied in the vertical relationships section of an Industrial Organization course, we could argue that all producers who had a role to play in the production of a product get fairly compensated for their value added.

The question in this case—that of the art market—is how much value is enough to transform someone else’s work into one’s own? And how little value added (in this case, some comments) is needed to transform an Instagram picture into a $90,000 work? How should the $90,000 price of that artwork be broken down between Richard Prince, the end-supplier, and those Instagram users who added their value in creating and uploading their image to the website? Didn’t they, after all, add much more value than Prince himself did? Or are Richard Prince’s contacts with the art market—his ability to be exhibited at Gagosian and at the Frieze, to print those snapshots and have them set up, worth incredibly large amounts of money? Is his name, the service he’s adding in getting these snapshots a fine art exposure, worth thousands upon thousands of dollars (these same questions could perhaps be asked, interestingly enough, of luxury fashion retailers: does the brand add that much value)?

And ultimately, this can lead us to ask: if Richard Prince’s service and value added are really worth that much, why is art fetching such high valuations? I’m certainly not the first to question art prices—Qatar is reported to have purchased Cézanne’s The Card Players for upwards of $250 million in a private transaction. The literature is extensive and often, understandably, must rely on the philosophical: art, after all, appeals to a part of us as humans that is perhaps “irrational”, that is “priceless” and invaluable.”

Yet, if that is true, and if simply adding several comments is enough value added to fetch thousands of dollars based on other people’s works, maybe it’s time we start copyrighting and trademarking every single thing we do.

Location Models in the Art Market

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 sample ngram, showing the mention in books of the names "Claude Monet", "Edouard Manet", and "Alfred Sisley", three noted Impressionists. Note the particularly high correlation between the mentions of Claude Monet and Edouard Manet.

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 20^th 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.

An Introduction

Hello! My name is Ricardo R. Rodriguez-Padilla. At the present moment, I’m a Senior at Columbia University just a month away from graduating with a Bachelor of Arts in Financial Economics and Business Management. After graduation, I’m lucky to be staying in New York City to work as an Analyst at the economic and financial consulting firm, Cornerstone Research. I hope to use my experience there as an exploration of many of the topics that I’m most passionate about in Economics. In particular, I hope to gain some further insight into topics in Industrial Organization, and use my time there as research experience I can put to use for a PhD in Economics a couple of years down the line.

Like many other people, I view Economics as a tool and a framework with which to think about and address many of the issues of our day. While many of these may be more “traditionally” in the realm of what people think about when they hear “Economics” (i.e. finance, money, growth, etc.), I’m particularly passionate about applying economic models to explore and consider less “traditional” questions, specially on the individual-scale of Microeconomics and in Cultural Economics.

I’m sure many would agree that Economics does not have all the answers; it often relies on simplifying assumptions, and the validity of those assumptions is often questionable in many scenarios. But economic models help provide a framework with which to begin exploring and identifying both the big-picture and microscopic-level questions we must ask when thinking about a problem or a phenomenon. To that extent, Economics can certainly inform and enlighten our analysis of policies and of organizational, individual, and macro-level decisions. Economic thinking can aid us in formulating and testing hypotheses, discovering factors we hadn’t considered before in a problem, guide our understanding, and ultimately provide preliminary (and sometimes, final) answers to the questions we’re trying to answer.

While I have many questions I’d like to answer, perhaps my most motivating questions are the ones that guide both those who are passionate about Economics and actual Economists (a rank I’d like to join myself soon). The questions that guide most of what I (and many others) think about are: What can I do to contribute to our understanding of behavior and decision-making (and the incentives and factors that play into those decisions)? More generally, how can I help understand and draw connections between the causes and the effects of the phenomena and the decisions by individuals, organizations, and nations-at-large that we see in our world and society today? And most importantly, how can I use that knowledge to create new, optimal effects through better, more informed decision-making, and ultimately (as cliché as it may sound) make our world a better place?

I hope this blog will serve as a place where I can explore some of the economic questions I’m concerned with as I hopefully move closer to a PhD in Economics.