Paper presented at Second Annual International Conference on Cultural Economics and Planning, sponsored by the Association for Cultural Economics, Mastricht, Holland, May 26-28, 1982.

In this introduction to the economics of the new art of computer games, there is space only for the most elementary economic treatment of the cultural decisions of computer game producers, consumers, markets, and government actors. Even this elementary treatment has not been able to avoid identifying some fascinating complexities in the economic behavior of one of the contemporary world's fastest growing industries and markets.

Computer games are defined as games played with the aid of, by, or among electronic computers. Computer games incorporate the physical sciences in the logical, linguistic and mathematical software of the stored instructions operating the physical systems. They incorporate the social sciences in the (economics) theory of games. Their designs combine the cognitive psychology of perception, estimation, and learning with the motivational psychology of dramatic conflict among empathetic actors in suspenseful uncertainty, the sociology and political science of groups in coalition and conflict, and the statistics of deadly quarrels and lesser outcomes.

Yet computer games are an art form. Already some include simple music and a few rough words of speech. Soon they will incorporate full musical scores, songs, and speeches committed to electronic memory by human artists. With colorful visual displays of their unfolding dramatic games they will be the electronic operas of a new intellectual aesthetics. Thus, computer games are an emergent art form combining the other art forms of drama, speech, music, graphic art, fiction writing, and the aesthetic athletics of finger control ballets. They are as much an art form as a Pirandello-style TV film with CUBE-type audience/actors participating in the play of the action and dramatically determining outcomes. Computer games are art as imitation/representation/simulation of some significant aspect of reality for participant observor audiences; art as expression of human fears, hopes, goal-directed conflicts and harmonizations; and art as a form of dramatic interaction of competitive behaviors within rules and constraints expressible in the elegant mathematical economics of John Van Neumann and Oskar Morgenstern. ( p. 121-122).

CONTENTS
Two-tier elasticities of supply and demand - a curious, common characteristic of the economics of computer games (and many other kinds of art products) production.
Public policy initiatives in regulation and subsidization of computer games.
Computer games - an opportunity for arts entrepreneurs?
Strategic positioning and inter-industry competition of the computer games industry.
Notes [bibliography].

Paper presented at Second Annual International Conference on Cultural Economics and Planning, sponsored by the Association for Cultural Economics, Mastricht, Holland, May 26-28, 1982.