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Art Markets and Auctions

  • Bruno S. FreyEmail author
Chapter
Part of the SpringerBriefs in Economics book series (BRIEFSECONOMICS)

Abstract

Art uses labour and capital. These resources are scarce. As a result, opportunity costs arise. Cultural consumers have to make a choice between various supplies of art. In a well-functioning market, supply and demand balance. Art markets, in particular auctions, are characterized by large risks that rarely exist in other markets. These relate to authenticity, attribution, quality, and theft. Some unexpected market changes may also occur. Behavioural anomalies such as ownership bias and home bias are prominent. Investment in art diversifies a portfolio. The most sensible strategy is to buy for love of art.

Keywords

Cultural consumers Opportunity cost Market-makers Auctions Record prices Risk Authenticity Attribution Quality Theft Behavioural anomalies Diversification Taxation Money laundering 

Related Literature

This chapter is partly based on

  1. Frey BS, Cueni R (2014) Special risks in the art market. Unpublished ms, University of ZurichGoogle Scholar

A pathbreaking contribution is

  1. Baumol WJ (1986) Unnatural value: or art investment as floating crap game. American economic review (Papers and Proceedings of the American Economic Association), 76(2):10–14Google Scholar

Various contributions on art markets and auctions are included in the textbooks and handbooks listed in the first chapter.

  1. Recent empirical analyses include Google Scholar
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The death effect is studied in

  1. Ursprung HW, Wiemann C (2011) Reputation, price and death: an empirical analysis of art price formation. Econ Inq 49(3):697–715CrossRefGoogle Scholar

Behavioural anomalies are discussed in

  1. Frey BS (2001) Inspiring economics. Human motivation in political economy. Edward Elgar, Cheltenham UK and Northampton, MA. USAGoogle Scholar
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Copyright information

© The Author(s), under exclusive license to Springer Nature Switzerland AG 2019

Authors and Affiliations

  1. 1.CREW - Center for Research in Economics and Well-BeingUniversity of BaselBaselSwitzerland

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