Academic journal article International Advances in Economic Research

Why Are Consumer Tastes and Expert Judgments Different? a Case Study of the Movie Industry

Academic journal article International Advances in Economic Research

Why Are Consumer Tastes and Expert Judgments Different? a Case Study of the Movie Industry

Article excerpt

JEL MOO

Audiences' and critics' reception to the arts are generally different This trend is especially evident in commercial arts like movies, television dramas and musicals. What explains the difference between consumers and critics' evaluation? Cultural commentators suggest that ordinary consumers' tastes differ from the criteria for excellence used by professional critics in providing expert judgments. In other words, critics' aesthetic values are more "lay" than those of the general public. This is known as the elite hypothesis. If the elite hypothesis is true, critics would have little influence on consumers' tastes.

In this study, I attempt to test the elite hypothesis by using economic modeling of consumer taste formation and artist utility maximization. Art goods are experience goods. Consumers do not know the quality of the good before consumption. In addition, consumers' tastes for the good grow as the good is consumed in greater quantities. This is a form of rational addiction. I will use addiction theory to model consumer taste formation. Most artists are utility-maximizing producers. Artists produce art works that not only please the market and but also themselves. Fame and aesthetic satisfaction are the primary non-pecuniary benefits for artists. Artists wish to go down in history as notable creators. So artists prefer to pursue artistic styles that are favored by the most prestigious critics. At the same time, artists seek monetary rewards for the artworks they produce. Artist utility depends on both the pecuniary and non-pecuniary benefits. They maximize their utility rather than profit. My model finds that the gap between the consumer's and the artist's perceived quality increases with an increase in the consumer's initial taste for the art and the rate of taste formation.

I then use data from the movie industry to test my model's prediction. I collected data on movies released between 2008 and 2012. I used genre popularity as a proxy for consumers' initial taste endowment and film sequels as a negative proxy for the rate of taste formation. Higher film sequels indicate a smaller rate of taste formation because consumers have past exposure of a similar form and are less surprised, so their taste will be formed at a slower rate.

Consumers' and critics' evaluation of films are measured by scores on Internet Movie Database webs ites. …

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