Rock and Roll Bands, (In)complete Contracts, and Creativity

摘要

Proposition I provides an easy way to test which model (complete or incomplete contracting) applies, since the sign of the correlation between success and dispersion and between outsourcing and dispersion tells us which type of contract has been entered into. Results are summarized in Table 1. Since success is a dichotomous variable, we simply test whether the difference in mean dispersion varies between albums with and without awards. The test shows that the difference is significantly negative and has a very low probability (0.0002) of being positive. Similar results are obtained with logit regressions, whether or not we introduce exogenous control variables that may affect sales, and thus awards, but not dispersion: (i) a dummy variable equal to one if the band is American, and zero otherwise (essentially British bands, but also from Canada, Australia, and Europe)— American bands do significantly better than others; (ii) a dummy variable equal to one if the label is from one of the major recording studios, and zero otherwise—it significantly helps to be produced by a major.