Art Markets and Auctions
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.
KeywordsCultural consumers Opportunity cost Market-makers Auctions Record prices Risk Authenticity Attribution Quality Theft Behavioural anomalies Diversification Taxation Money laundering
This chapter is partly based on
- Frey BS, Cueni R (2014) Special risks in the art market. Unpublished ms, University of ZurichGoogle Scholar
A pathbreaking contribution is
- 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.
- Recent empirical analyses include Google Scholar
- Dimson E, Spaenjers C (2014) The investment performance of art and other collectibles. In: Dempster A (ed) Risk and uncertainty in the art world. Bloomsbury, London, pp 219–238Google Scholar
- Klamer A (2014) Without uncertainty, there is no art market. In: Dempster A (ed) Risk and uncertainty in the art world. Bloomsbury, London, pp 275–286Google Scholar
- Spaenjers C (2010) Returns and fundamentals in international art markets. Job market paperGoogle Scholar