Give an example of Moral Hazard in the Cultural Industries by Carolina Dalla Chiesa https://padlet.com/carolinadallachiesa/5mjnes4bb6p41bqt Does this apply in the cultural industries? Is there MORAL HAZARD in CCIs? en-us 2021-02-21 16:04:36 UTC 2025-12-08 23:05:56 UTC hello@padlet.com Moral Hazard: when a party, in a transaction, has incentives to undertake unusual risks as he/she faces no incentives to abide by the rules or expectations. carolinadallachiesa https://padlet.com/carolinadallachiesa/5mjnes4bb6p41bqt/wish/1223582660 Ex: not following the clauses of contracts.]]> 2021-02-21 16:06:37 UTC https://padlet.com/carolinadallachiesa/5mjnes4bb6p41bqt/wish/1223582660 Food Industry: The upstream industries in Food Industries can be an example of moral hazard as they may try to sell inferior or harmful products which the downstream company, involved in packaging and distribution of products may not be aware of. https://padlet.com/carolinadallachiesa/5mjnes4bb6p41bqt/wish/1225696862 2021-02-22 10:13:21 UTC https://padlet.com/carolinadallachiesa/5mjnes4bb6p41bqt/wish/1225696862 In the case of art auctions, there is the moral hazard of timing that is crucial for investors. Bidders have different background information on the piece and have different incentives to purchase. The pressure of timing and competition amongst bidders leads to the eventual price. https://padlet.com/carolinadallachiesa/5mjnes4bb6p41bqt/wish/1225716604

]]> 2021-02-22 10:19:52 UTC https://padlet.com/carolinadallachiesa/5mjnes4bb6p41bqt/wish/1225716604 Within a gallerist-artist relationship for example, as mentioned also in the lecture, most of the times there are no formal contracts but there might be an informal relationship between the two parties simply deciding that the profit is divided equally (50-50). However, what can happen is that since there is no formal contract, if the artist does not continue to sell very well, the gallery might decide one day from another to simply "end" this joint-venture and move on to the next artist. This would mean leaving the artist alone with no protection whatsoever. https://padlet.com/carolinadallachiesa/5mjnes4bb6p41bqt/wish/1225717151 2021-02-22 10:20:01 UTC https://padlet.com/carolinadallachiesa/5mjnes4bb6p41bqt/wish/1225717151 Artists-gallery relationship https://padlet.com/carolinadallachiesa/5mjnes4bb6p41bqt/wish/1225756888 Artists often want to be innovative which brings a lot of costs along with them. Sometimes they experiment with styles or change styles (while styles are . Promotion made by galleries can change according to this particular style. The change of style is therefore a risk, since the galleries have to change their tactics in promoting particular works of art which again bring new costs along with them. ]]> 2021-02-22 10:32:39 UTC https://padlet.com/carolinadallachiesa/5mjnes4bb6p41bqt/wish/1225756888 The environment https://padlet.com/carolinadallachiesa/5mjnes4bb6p41bqt/wish/1225778060 Most activities performed by firms in the Cultural and Creative Industries have some impact on CO2 emissions and the climate. The extra costs this leads to are costs that weigh on the whole world, while not everybody has made use such firms, like fast-fashion.]]> 2021-02-22 10:39:26 UTC https://padlet.com/carolinadallachiesa/5mjnes4bb6p41bqt/wish/1225778060 Literature https://padlet.com/carolinadallachiesa/5mjnes4bb6p41bqt/wish/1225782263 When a book is published the publisher and the author might agree on a minimum of X amount of copies sold. However if the book underperforms because the publisher is not marketing it correctly, then the artist pays the price for this. ]]> 2021-02-22 10:40:55 UTC https://padlet.com/carolinadallachiesa/5mjnes4bb6p41bqt/wish/1225782263 Creative agency & corporate cliënt https://padlet.com/carolinadallachiesa/5mjnes4bb6p41bqt/wish/1225799595 The corporate cliënt often has little knowledge of the time and costs that are involved in creating for example a campaign, on one end of the spectrum there is the corporate cliënt that says: “how hard is it to think of a creative idea?” And: “It is fun to work on creative ideas right? So why should we pay you equally to what we pay a lawyer?” On the other end of the spectrum, especially with big cooperations, there are large budgets that might not be spend at the end of the book year, so these clients are willing to pay an agency much more. This is why it is hard for creative agencies to set a price, but also a potential moral hazard. How can the clients trust the creative agency in forming the right price? When the time spent on creative ideas can differ so much?]]> 2021-02-22 10:47:02 UTC https://padlet.com/carolinadallachiesa/5mjnes4bb6p41bqt/wish/1225799595 The film industry https://padlet.com/carolinadallachiesa/5mjnes4bb6p41bqt/wish/1225815679 During the Hollywood studio system long-term contracts used to be the standard when signing in actors. However, at some point it is likely that the film studio would like to innovate a little, and allow for creativity. At the same time, the actor does not have this incentive since he/she is already paid. Chances are that the actor would like to continue on the same level and feels no need to expand his/her training, or come up with something new because the monetary incentive is already received, despite the work he/she delivers.]]> 2021-02-22 10:51:55 UTC https://padlet.com/carolinadallachiesa/5mjnes4bb6p41bqt/wish/1225815679 Stuck to a certain contract https://padlet.com/carolinadallachiesa/5mjnes4bb6p41bqt/wish/1226368728 In the film as well as the music industry, it often happens that a talent signs a contract for an agent to represent them. However, often times that means that they have little room to grow or experiment, because it says in the contract that they need to do certain things a certain way. I'm thinking about the K-pop industry for example or the winners of talent shows (like X-factor or the voice) that promise fame but eventually close in the talent by all these rules they have to obide.]]> 2021-02-22 13:41:43 UTC https://padlet.com/carolinadallachiesa/5mjnes4bb6p41bqt/wish/1226368728 Music Industry https://padlet.com/carolinadallachiesa/5mjnes4bb6p41bqt/wish/1230898859 Record labels invest in musicians and try to earn from to success of the musician. But because creativity is uncertain, it can be hard to make a contract. Moral Hazard can happen when a musician already got the investment money from the label, but uses the money for something else.]]> 2021-02-23 11:52:01 UTC https://padlet.com/carolinadallachiesa/5mjnes4bb6p41bqt/wish/1230898859 Artist residencies https://padlet.com/carolinadallachiesa/5mjnes4bb6p41bqt/wish/1234311646 Artist residencies exist in a space where various expectations are assumed on both (funder/host institution, visiting artist) or all three sides (funder, host institution, visiting artist) but very few things are formalised in the contract/s, if there even are contracts or MoUs. Sometimes an artist is requested to make a new piece that they exhibit by the end of their stay but the rights of this work of art are often in a grey area. Who does it belong to and where does it go after the residency? Also, resident artists are often requested to give public presentations about their work or offer workshops, the scope of which is very vague. The whole living & studio set-up also leaves room for miscommunications and unmet expectations. ]]> 2021-02-24 01:17:05 UTC https://padlet.com/carolinadallachiesa/5mjnes4bb6p41bqt/wish/1234311646 In publ https://padlet.com/carolinadallachiesa/5mjnes4bb6p41bqt/wish/1240548423 2021-02-25 11:50:02 UTC https://padlet.com/carolinadallachiesa/5mjnes4bb6p41bqt/wish/1240548423