On the emergence of non‐profit orchestras
Bibliographic Data
| ID | 12614059 |
|---|---|
| Authors | Kazuhiko Mikami (0000-0002-7566-4018, Department of Economics and Management University of Hyogo, corresponding author) |
| Year | 2020 |
| Volume | 91 |
| Issue | 2 |
| Pages | 169-189 |
| Publication date | 2020-03-08 |
| Peer Reviewed | Yes |
| Open Access | Yes |
| Type | ARTICLE |
| Venue | Annals of Public and Cooperative Economics (JOURNAL) |
| Journal identifiers | ISSN: 1370-4788 • E-ISSN: 1467-8292 |
| Publisher | Wiley (PUBLISHER • GB) |
| DOI | 10.1111/apce.12267 |
| OpenAlex | W3010270337 |
| Language | EN |
| References cited | 6 |
In the market for live classical music, a symphony orchestra typically has fixed costs that are high relative to demand, so that the demand curve lies entirely below the average cost curve (Baumol & Bowen, 1966)—a situation in which a for‐profit enterprise cannot survive. The present study aims to explain how a non‐profit orchestra can survive in such an adverse market environment by relying on private donations, even in the absence of altruism. We argue that a financially distressed orchestra may employ a strategy to impose a non‐profit distribution constraint on itself—thus becoming a non‐profit, tax‐deductible organization—and use its member musicians' worker surplus to produce donor privileges, which enables the orchestra to induce donations from an individually rational audience by taking advantage of a tax deduction scheme. With this strategy, the orchestra can successfully extract consumer surplus from the audience to offset its loss
Business · Economic surplus · Economics · Market economy · Microeconomics · Offset (computer science · Profit (economics · Welfare · Computer Science · Experimental Behavioral Economics Studies · Fiscal Policy and Economic Growth · Gender, Labor, and Family Dynamics
| Citation velocity | historical |
|---|---|
| Highly cited | No |