Abstract
This study aims to offer a formal analysis which relates provision of cultural goods to the society’s level of cultural capital. Such a level is assumed to already exist in society and is increasable thanks to individual support for the offer of cultural goods. The achievement of the highest levels of cultural capital increases satisfaction coming from cultural goods consumption, and then voluntary contributions. Social approval, deriving from donations, is positively related to society’s existing cultural capital and triggers a positive externality for donators, thus increasing contributions and generating a positive externality for the whole society. The dynamic analysis provided in this study requires the adoption of a differential game where individuals interact, making their choices on their voluntary contribution level. We find that, under certain conditions, the solution obtained for the Nash equilibrium with closed-loop strategies provides optimal level of cultural capital that exceed the Pareto efficient solution obtained through open-loop strategies.
Highlights
Nash equilibrium with closed-loop strategies provides optimal level of cultural capital that exceed the Pareto efficient solution obtained through open-loop strategies
In order to investigate the evolution of voluntary contributions to changes in the economy cultural capital level, we use a differential game approach
In order to investigate the evolution of voluntary contributions to changes in the economy’s cultural capital level, we used the differential game approach
Summary
Our work draws from an shareable statement: it is preferable to live in a society endowed with a high level of cultural goods. It becomes possible to witness an increase in individual voluntary contributions, which triggers an increase in the cultural goods private offer Once more, such conditions allow for generating a higher level of cultural capital. Some people like living in a more cultivated society [9] and gain advantages from an increase in the number of theatres in their city, though not making use of them These individuals draw benefits from the creation of cultural goods, they choose not to contribute to their offer. A greater level of cultural capital present in society increases the attention level towards cultural goods and, through social approval, encourages subjects to offer constantly growing contributions. It is possible to determine the economy’s optimal level of cultural capital which allows a society to reach the voluntary contribution equilibrium values
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