Motion pictures constituted a revolutionary new technology that transformed entertainment—a rival, labor-intensive service—into a non-rival commodity. Combining growth accounting with a new output concept shows productivity growth in entertainment surpassed that in any manufacturing industry...

We investigate the long-run historical pattern of R&D-outlays by reviewing aggregate growth rates and historical cases of particular R&D projects, following the historical-institutional approach of Chandler (1962), North (1981) and Williamson (1985). We find that even the earliest R&D-projects...

We investigate the long-run historical pattern of R&D-outlays by reviewing aggregate growth rates and historical cases of particular R&D projects, following the historical-institutional approach of Chandler (1962), North (1981) and Williamson (1985). We find that even the earliest R&D-projects...

In the 1900s, the European film industry exported throughout the world, at times supplying half the US market. By 1920, however, European films had virtually disappeared from America, and had become marginal in Europe. Theory on sunk costs and market structure suggests that an escalation of sunk...

This paper identifies four economic tendencies that shaped the development of the international recorded music industry since 1945: the importance of endogenous sunk costs led to a quality race; the fact that marginal revenue equalled marginal profit led to extreme vertical integration; the...

This paper discusses the emergence and growth of various media industries in Britain. It shows how a rise in real wages and leisure time, rapid urbanisation and the development of fast urban transport networks, and a rapid growth of the market’s size let to a sharp rise in the demand for media...

This paper discusses the problem, implied by Arrow’s fundamental paradox of information, of how to make money from news. To earn money from important news, news traders need to tell the potential buyer what it is, yet once they have revealed it, the buyer no longer needs to pay. This paper...

This chapter examines the long-run evolution of modern entertainment industries such as the film and music industries. It investigates ways to conceptualise and quantify the subsequent waves of creative destruction, and investigates specifically how sunk costs affect the evolution of the...