Paper presented at First International Conference on Arts and Economics, sponsored by the Association for Cultural Economics, held in Edinburgh, Scotland, August 8-10, 1979. Comment by Adrian Kendry appears on p. 136-137. Comment by V.N. Krishnan appears on p. 138.

Economists and others interested in the economics of the arts often find themselves talking at cross-purposes. To the noneconomist it seems to be self-evident that the arts are a special case, meriting special treatment and special encouragement from the government. By contrast, the economist is hard put to say what there is that makes them more special than any other goods, for example, potatoes. Thus, the economist falls back on the assumption that there is, in fact, nothing special about artwork, with the result that each scholar seems to be missing the other's point.

To most economists, the best known category of exceptions is the category which encompasses public goods and externalities, in which government action may be merited on efficiency grounds as a means of overcoming the free rider problem. There is, however, a large literature on markets with imperfect information, which includes some interesting hypothetical pathologies or special cases. In particular, Akerlof's market for lemons attracts consideration as a category of exceptions or possible exceptions. This paper explores the possibility that the lemon model may be a means of bridging the gap between the humanist and the economist in arts policy, that is, a key to posing hypotheses of arts exceptionalism in terms that are mutually comprehensible and that may lead ultimately to empirical tests. This paper will attempt not to prove any hypotheses but rather to pose some hypotheses about the economics of art. The purpose is to establish that the lemon model is of interest for the economics of the arts and to stimulate its further study. (p. 122)

CONTENTS
Evasive tactics.
The starving artist theorem.
Conclusion.
Notes.
References [bibliography].

Paper presented at First International Conference on Arts and Economics, sponsored by the Association for Cultural Economics, held in Edinburgh, Scotland, August 8-10, 1979. Comment by Adrian Kendry appears on p. 136-137. Comment by V.N. Krishnan appears on p. 138.