intellectual vanities… about close to everything

Posts Tagged ‘economy

King Napster Or The Seven-year War On Downloading Music

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A fascinating new paper from the Journal of Consumer Research investigates the seven-year war on music downloading that unfolded among corporate music executives and music downloaders. Markus Giesler (York University) uses a performance-ethnography approach, studying the music marketplace as a cultural stage on which consumers and producers interact as dramatic players to reach their conflicting goals.

As a record producer during Napster’s emergence in the late ’90s, Giesler had first hand experience dealing with several issues: How does market evolution change price-value relationships for music? Will this fundamentally new way of music consumption herald the end of the music market? Was there a common pattern of historical transformation at work that, once revealed, could be used to better understand other instances of market evolution?

To answer these questions, he sought to identify both the fundamental cultural tensions that drive the performances of downloaders and producers on the market stage, and the dramatic plot structure that integrates the war on music downloading into a historical narrative of market evolution.

“These findings yield some novel theoretical insights for the study of market system dynamics,” Giesler says. “This study has argued for more attention to the idea that markets are staged compromises between sharing and owning.”

Giesler argues that, between 1999 and 2006, the music market moved through a process of structural change that involved much unusual drama. The drama unfolded over an enduring cultural tension: the conflict between utilitarian and possessive ideals as they applied to music as a cultural resource. These ideals influenced the behavior and statements of music consumers and producers.

Giesler then divides this dramatic conflict into four historical acts: In the first act, a breach was made visible by the violation of market norms (the emergence of Napster). The second act was a crisis or extension of the breach, during which each of the antagonists took a more radical stance towards the other camp and the breach widened publicly (the expansion of music downloading). The corporate response led to the third act, the application of redressive mechanisms to restore normalcy (the music industry’s anti-downloading campaign and the prosecution of individual downloaders). The fourth act was a reintegration (the commercialization of downloading through Apple’s iTunes and other corporate players).

“The profound implication here is that marketplace dramas can take place in every market–from music to organic food. The cast changes every time, but the story is more or less the same. These findings not only can be used to understand and predict other instances of market evolution; they also reveal the stuff that heroes are made of and the reasons why some of them fail,” Giesler explains.

Giesler points out that managers, consumers, and public policy makers can use the idea of marketplace drama to better understand and manage similar market conflicts. For example, the idea of markets as dramatically acquired compromises between sharing and owning informs the ongoing war between the Youtube community and the motion picture industry. Marketplace drama can also be used to better understand and explain the commercial cooptation and ideological reclaiming of market countercultures such as the organic food movement.

 Markus Giesler: 

“Conflict and Compromise: Drama in Marketplace Evolution.” 

How do markets change? Findings from a 7-year longitudinal processual investigation of consumer performances in the war on music downloading suggest markets in the cultural creative sphere (those organizing the exchange of intellectual
goods such as music, movies, software, and the written word) evolve through stages of perpetual structural instability. Each stage addresses an enduring cultural tension between countervailing utilitarian and possessive ideals. Grounded anthropology and consumer behavior, I illustrate this historical dynamic through process of marketplace drama, a fourfold sequence of performed conflict opposing groups of consumers and producers. Implications for theorizing onmarket system dynamics and the consumption of performance are offered.

Written by huehueteotl

February 15, 2008 at 10:08 am

Posted in Current Affairs

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Even Momentary Sadness Increases Spending

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How you are feeling has an impact on your routine economic transactions, whether you’re aware of this effect or not. In a new study that links contemporary science with the classic philosophy of William James, a research team finds that people feeling sad and self-focused spend more money to acquire the same commodities than those in a neutral emotional state.

The new study follows up on earlier research that established a connection between sadness and buying. Researchers Cynthia Cryder (Carnegie Mellon University), Jennifer Lerner (Harvard University), James J. Gross (Stanford University), and Ronald E. Dahl (University of Pittsburgh) have now discovered that heightened self-focus drives the connection — a finding that expands understanding of consumer behavior and, more broadly, the impact of emotions on decision-making.

In the experiment, participants viewed either a sad video clip or one devoid of human emotion. Afterward, participants could purchase an ordinary commodity, such as a water bottle, at various prices. Participants randomly assigned to the sad condition offered almost 300% more money to buy the product than “neutral” participants. Notably, participants in the sadness condition typically insist, incorrectly, that the emotional content of the film clip did not carry over to affect their spending.

Self-focus helps to explain the spending differences between the two groups. Among participants “primed” to feel sad, those who were highly self-focused paid more than those low in self-focus. Notably, sadness tends to increase self-focus, making the increased spending prompted by sadness difficult to avoid.

Why might a combination of sadness and self-focus lead people to spend more money? First, sadness and self-focus cause one to devalue both one’s sense of self and one’s current possessions. Second, this devaluation increases a person’s willingness to pay more for new material goods, presumably to enhance sense of self.

Notably, the “misery is not miserly” effect may be even more dramatic in real life, as the low-intensity sadness evoked in the experiment likely underestimates the power of intense sadness on spending behavior. The effect could extend to domains beyond purchasing decisions, causing people to engage in increased stock trading, for example, or even to seek new relationships– without conscious awareness that they are being driven by their emotions.

The study is an early step toward uncovering the hidden impact of different, fluctuating, and what would otherwise seem irrelevant emotions on our day-to-day decisions.

The article, that is available at several websites, will be published in the June 2008 edition of Psychological Science and will be presented at the Society for Social and Personality Psychology’s Annual Meeting on Feb. 9.:

Carnegie Mellon:

Lerner Lab:

Cryder, C. E., Lerner, J. S., Gross, J. J., & Dahl, R. E. (in press).
Misery is not miserly: Sad and self-focused individuals spend more.
Psychological Science
Misery is not miserly: sadness increases the amount of money decision makers give up to acquire a commodity (Lerner, Small, & Loewenstein, 2004). The present research investigated when and why the “misery-is-not-miserly” effect occurs. Drawing on William James’s (1890) concept of the material self, we tested a model specifying relationships among sadness, selffocus, and the amount of money decision makers spend. Consistent with our Jamesian hypothesis, results revealed that self-focus both moderates and mediates the effect of sadness on spending. Results were consistent across males and females. Because the study used real
commodities and real money, results hold implications for everyday decisions. They also hold implications for theoretical development. Economic theories of spending may benefit from incorporating psychological theories – specifically theories of emotion and the self.

Written by huehueteotl

February 9, 2008 at 3:39 pm

Let Us Eat And Drink; For To Morrow We Shall Die.

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At least Isaiah xxii. 13 (AV) has it like this. he did not know that overweight smokers are an even less financial burden for public health. They simply die soonest, causing the least cost in health care systems.

A new research paper suggests that preventing obesity might result in increased public spending on medical care. Many countries are currently developing policies aimed at reducing obesity in the population. However, it is not currently clear whether successfully reducing obesity will also reduce national healthcare spending or not. Pieter van Baal and colleagues, from the National Institute for Public Health and the Environment in the Netherlands, created a mathematical model to try to answer this question.

In their study, van Baal and his co-workers created three hypothetical populations of 1000 men and women, all aged 20 years at the start: a group of obese, never-smoking individuals; a group of healthy-never smoking individuals of normal weight; and a group of smokers of normal weight. The model produced an estimate of the likely proportion of each group who would encounter certain long term (chronic) diseases, and then estimated what the approximate cost of medical care associated with each disease was likely to be. The researchers found that the group of healthy, never-smoking individuals had the highest lifetime healthcare costs, because they lived the longest and developed diseases associated with aging; healthcare costs were lowest for the smokers, and intermediate for the group of obese never-smokers.

However, the authors argue that although obesity prevention may not be a cure for increasing expenditures, it may well be a cost-effective cure for much morbidity and mortality and importantly contribute to the health of nations.

Should Isaiah’s biblical ammendment be then. “Eat, drink, smoke and be merry, for tomorrow we diet”? Mind, this is a mathematical model comparing life-time-health-costs. Main target of medicine is not keeping public health cheap but people healthy until old age! A Perspective by Klim McPherson, from Oxford University in the UK, who was not involved in the study, discusses the implications of these findings and comments that “it would be wrong to interpret the findings as meaning that public-health prevention (e.g., to prevent obesity) has no benefits”; the quality of life experienced by individuals, and other factors, must also be taken into account when planning interventions aimed at improving public health.

van Baal PHM, Polder JJ, de Wit GA, Hoogenveen RT, Feenstra TL, et al. (2008)

Lifetime medical costs of obesity: Prevention no cure for increasing health expenditure.

PLoS Med 5(2): e29. doi:10.1371/journal.pmed.0050029

BackgroundObesity is a major cause of morbidity and mortality and is associated with high medical expenditures. It has been suggested that obesity prevention could result in cost savings. The objective of this study was to estimate the annual and lifetime medical costs attributable to obesity, to compare those to similar costs attributable to smoking, and to discuss the implications for prevention.

Methods and Findings

With a simulation model, lifetime health-care costs were estimated for a cohort of obese people aged 20 y at baseline. To assess the impact of obesity, comparisons were made with similar cohorts of smokers and “healthy-living” persons (defined as nonsmokers with a body mass index between 18.5 and 25). Except for relative risk values, all input parameters of the simulation model were based on data from The Netherlands. In sensitivity analyses the effects of epidemiologic parameters and cost definitions were assessed. Until age 56 y, annual health expenditure was highest for obese people. At older ages, smokers incurred higher costs. Because of differences in life expectancy, however, lifetime health expenditure was highest among healthy-living people and lowest for smokers. Obese individuals held an intermediate position. Alternative values of epidemiologic parameters and cost definitions did not alter these conclusions.


Although effective obesity prevention leads to a decrease in costs of obesity-related diseases, this decrease is offset by cost increases due to diseases unrelated to obesity in life-years gained. Obesity prevention may be an important and cost-effective way of improving public health, but it is not a cure for increasing health expenditures.

Written by huehueteotl

February 7, 2008 at 4:23 pm