Tribal art market: signs and signals

In this paper, we present a model for the marketability of a Tribal artwork, and we test this model empirically using a unique hand-collected dataset, which comprises the worldwide Tribal art market auctions between 1999 and 2008. Our results show a significant relationship between the probability of an artwork to be sold and several signs and signals. The effect of the auction estimated prices on the probability of sales is nonlinear and allows us to divide the Tribal art market into two price regimes. In the low-price regime, the effect of the auction estimated price on the probability of sales is negative. In the high-price regime, the effect of the auction estimated price on the probability of sales is positive.     

Autographs and the global art market: the case of hedonic prices for French autographs (1960–2005)

The market for autographs has become more open to international buyers since 1990. Our data set features a large sample of store and auction sales for selected authors every 5 years from 1960 to 2005. The estimation of a hedonic price function shows that page count, type of author, date and type of the document conditionally to author explain more than three quarters of the price differences. The apparent price of autographs increased by 7.7 % per year during the period, while the hedonic price index increased by 7.9 % on average. With a supply function responsive to market valuation, as well French autograph prices seemingly showing trend similar to art market index, the French autograph market has become more integrated in the global art market.     

Investment in early American art: the impact of transaction costs and no-sales on returns

Art, along with other “treasure assets,” has become a central object for investment opportunities. Investment return studies using hedonic and resale price regressions on different artistic periods and styles produce estimates of varying rates of return, predominately low rates with high standard deviations. The present study employs a new sample of American art sold at auction between 1987 and 2011—art created before 1950 by 33 artists born prior to 1900. Our study, unlike those that preceded it, considers works that are no-sales (those “bought-in” for failing to sell at auction at or above a predetermined and negotiated minimum price), in addition to full transaction costs—buyers and sellers premia on hammer prices. We conclude that investment return calculations are biased upward and may be negative when these factors are considered and that the “consumption utility” of art may be higher than previously thought. However, using a variant of the capital asset pricing model, we find that investment in early American art may still be desirable in a diversified portfolio of assets for when the price of stock assets falls, the price of art does not fall in the same proportion.     

Public choice in the tertiary art market

InMaking the Mummies Dance, Thomas Hoving, former director of the Metropolitan Museum of Art, articulates a blistering defense of his, admittedly minority, view; namely, that trading directly with dealers when selling deaccessioned works of art or adding to museum collections is preferable to buying and selling in the open auction market (Hoving, 1992). Hoving has been severely criticized for his trades during his tenure at the Metropolitan, as well as for his assessment of the market for fine arts, which runs counter to the prevailing views held by many American public officials, professional art critics and museum boards. We shall present a theoretical model in support of Hoving's argument that trades made at auctions may not serve the public interest. We shall also statistically investigate the stochastic processes which characterize the tertiary art market.     

Price determinants and genre effects in the Korean art market: a partial linear analysis of size effect

This paper examines the price determinants of paintings in the Korean art market in the context of a hedonic price regression to investigate whether the hypothesis of the modified unit pricing system holds for the pricing of Korean modern and contemporary paintings. Using Korean auction data, I show that the parametric results provide overwhelming evidence that Korean art pricing does not function in accordance with the modified unit pricing scale. However, I re-examine this hypothesis using a semiparametric partial linear regression that does not require the prespecification of a functional form prior to estimation. Rather, the semiparametric approach allows the data to determine the exact form of the size-price profile. This result confirms that the modified unit pricing system applies to the Korean contemporary and modern painting market.     

The impact of the <Emphasis Type="Italic">Droit de Suite</Emphasis> in the UK: an empirical analysis

The Droit de Suite, known in the UK as Artists’ Resale Rights, provides an artist with the inalienable right to receive a royalty based on the resale price of an original work of art. This paper provides an empirical analysis of actual changes in the UK auction market for art that is newly subject to the Droit de Suite (DDS) because of a change in law. All changes are measured relative to changes for art not subject to the DDS and relative to changes in the auction markets for art in countries where there has been no change in law. We do a difference-in-difference analysis, differencing price growth and sales growth across market segments and across countries over the period 1993–2007. Our results suggest that the introduction of the DDS has not had a consistent negative impact on the UK art auction market during the period of study.     

The auction market for artworks and their physical dimensions: Australia—1986 to 2009

Within a hedonic pricing model, the preferences of Australian art purchasers are investigated. Emphasis is placed on the impact of an artwork’s dimensions upon its auction price. A salient aspect of this is the first test of the ‘golden ratio’ hypothesis in a market situation. It is concluded that purchasers prefer paintings that deviate from the golden rule. The ‘orientation’ of works (portrait, landscape or square) as well as size also helps determine price. The impact of winning the Archibald portraiture prize (Australia’s foremost art prize) is found to have significant and positive impacts on winning artists’ prices. This suggests that purchasers are not fully informed. In addition, a previously unsuspected relationship between artwork dimensions and Archibald prize winners was found. As well as purchasers’ preferences, the artists’ choices of the dimensions of their artworks are considered.     

Price Indices for Artists – A Proposal

This paper proposes a price index for artists adjusted for the quality of the paintings, based on the ratio between the average market price and the average pre-sale estimate for paintings. We apply this methodology to a group of selected artists and schools presented in auctions worldwide in the period 1990–2001. A comparison with quality unadjusted and hedonic indices is also conducted.JEL Classification: C10, Z11     

Bidding and prices for online art auctions: sofa art or investment

The article uses auction data collected from the eBay internet site to examine the effect of various parameters on number of bids and selling price of art. The article further uses an insight from the auction literature to gather evidence about whether art on eBay is purchased for consumption or investment purposes. The article argues that the evidence found of a positive relationship between the number of bids and the final price suggests that art sold on eBay is not, in general, investment art.      

Art Auctions and Bidding Rings: Empirical Evidence from German Auction Data

This article illustrates the determinants of bidder collusion using data from German auctions. Special attention is thereby devoted to the question at whether art and antiques auctions are particularly attractive for bidding rings as the conditions for rings to succeed may be quite favorable at these auctions. Cartel stability at art auctions, for example, may be enforced by the structure of bidders or the expected surplus from collusive arrangements. Actually, the estimations of a binary choice model show that even after controlling for determinants suggested by auction theory, art and antiques auctions turn out to be particularly susceptible to bidder collusion.     

The law of one price,noise and “irrational exuberance”: the auction market for Picasso prints

We use prices realized for Picasso prints at auctions worldwide, as well as the 100 prints that comprise his Vollard Suite, to test the law of one price: the proposition that identical art objects sold contemporaneously should command the same price regardless of the auction house or geographic region where the sale takes place. Picasso is the most prolific printmaker of the twentieth century and, from 1977 to 2004, his prints appreciated in price significantly faster than the prints of modern masters as a whole. We find that Picasso prints sold in the United States command higher prices than in Europe. However, prices realized at Sotheby’s in New York are no longer higher than at Christie’s in New York, nor at Kornfeld than at other auction houses. We find evidence of “irrational exuberance” in the transitory nature of the extraordinary prices realized for the Picasso prints included in the 1997 sale of the collection of Victor and Sally Ganz at Christie’s in New York. More generally, we find substantial noise in auction outcomes, a result well known to savvy auction goers.

The Politics of Value in French Funeral Arrangements

This paper draws upon the history of the funeral market over two centuries to examine three major devices which have played a central role in the funeral economy, both in terms of defining the nature of the ‘goods’ and their attendant value but also in regulating the relations between the Pompes Funèbres and the other institutional actors involved. It highlights the ways in which these devices provide a ‘politics of value’ performing the articulation between the formatting of economic value and the pursuit of political concerns. First, observing the constitutional phase of the private industry, it examines the ‘system of the classes’ as a central device of managing dissonance between conflicting interests. Then, a historical jump leads us to half way through the twentieth century to the market infrastructure formed by the management of ‘care for the deceased’. As a third point, the exponential development of death insurance in recent years appears as an expression of rationalization of funeral arrangement. The analysis of the market devices will highlight an essential property, that is, the incorporation of a ‘calculation formula’ which set up both the profit sharing and the handling of moral and political issues.     

Picasso Paintings at Auction, 1963–1994

We examine the market of Picassopaintings sold at auction between 1963 and 1994. Using the hedonic regression method we test whetherand in which way dimensions, materials used,signature, where and by whom the art work was sold,the catalogue raisonné number, working periods,exhibitions and provenance play a significant role inthe determination of the price. We find that manyfolk-assumptions are not supported by the data athand.     

Uncertain hog futures: life,death, and arbitrage on the factory farm

ABSTRACT

Between 2013 and 2014, PED virus (PEDv) swept through American pig farms, killing millions of animals and causing a market panic that drove the prices of both physical pork and lean hog futures to all-time highs. However, a divergence between pricing in financial markets and on-farm realities allowed some producers to reap record profits via a unique form of biological arbitrage. This arbitrage was novel in that it allowed for an underlier (pigs) to be used to profit from fluctuations in the price of a derivative (lean hog futures). This article explores the case of PEDv to examine the entanglements and divergences between ‘real’ and ‘abstract’ values in financialized industries, paying particular attention to the schisms between the imaginaries and practices of actors in the financial and tangibly productive links of the agricultural value chain. To do so, it examines the historical co-constitution of American agriculture and the financial sector, and shows how in the contemporary moment these two ever-more-intertwined sectors are nonetheless marked by important differences. It argues that the nature of agricultural production can confound the expectations of finance, and highlights the fact that financialization entails contextually-specific practices that can lead to uneven and unexpected market outcomes.     

The value of a good reputation online: an application to art auctions

Using a unique dataset of art auctions on eBay, we conduct an empirical analysis of the value of a seller’s online reputation. Several aspects distinguish our work from most existing research. We analyze a heterogeneous panel data consisting of a large number of observations over a large period of time, including significant variation in reputation across and within sellers. The panel structure of our dataset allows us to employ fixed effects techniques to control for observed and unobserved differences across auctions. Our results point to a highly significant, and sizable, impact of a negative reputation on the behavior of market participants and on market outcomes. Negative feedback is associated with a significant reduction in the number of bidders and a reduction in the probability of sale; negative feedback is also associated with a significant reduction in sale price. Consistent with previous research, the impact of additional positive feedback on market outcomes for the seasoned sellers in our sample is not statistically significant.     

A Note on Financial Risk, Return and Asset Pricing in Australian Modern and Contemporary Art

In this note, 30,227 paintings by fifty well-known modern and contemporary Australian artists sold at auction over the period 1973–2003 are used to construct a hedonic price index. The attributes included in the hedonic regression model include the name, age and living status of the artist, the number of works sold, the size and medium of the painting, and the auction house, month and year in which the painting was sold. The results indicate that returns on Australian modern and contemporary art averaged nearly five percent over the period with a standard deviation of sixteen percent. The results also show that a ten percent increase in the Australian stock market is associated with a 3.4 percent increase in the art market. Generally, artworks by artists deceased at the time of auction, larger works, works executed in oils, and those auctioned by Sotheby's or Christies in July or August are associated with higher prices.     

The Impact of Museum Purchase on the Auction Prices of Paintings

This study examines how art museumspurchasing policy influences the auction prices ofpaintings. Using a cross section of non-speculativetransactions during the period 1820–1970, we findconsiderable empirical support for the hypothesisthat public museums outside the U.S. pay above averageprices in auction markets providing higher thanaverage yields to private sellers. The typical U.S.private museums appear to be more restricted byfinancial constraints and the development of thegeneral economic conditions than their publiccounterparts.     

On the Politics of Calculative Devices

This article examines the politics of calculative devices in one of the most successful areas of finance, the life insurance business. By empirically tracing an insurance applicant's risk trajectory, it analyses how calculative devices perform insurance underwriting through acting on insurance risk decisions. This allows one to document what calculative devices exactly do, and to point out the political effects of what they do. First, it highlights the fact that, contrary to thinking in terms of ‘the insurance logic’, there are multiple ways of calcuting life insurance risks. Second, it underscores the crucial role of calculative devices in that process by demonstrating how they align considerations as divergent as economics and medicine to perform a life insurance market. It then demonstrates the political effects of these calculative devices by making explicit how the latter contribute to the production of inequalities in calculative power in life insurance. In this way, the article links up insights from the performativity approach in the sociology of markets with the broader question of governing economic life. Such an approach, it is argued, provides the opportunity to open up the organization of economic markets and to put classic questions of justice and power struggles in economic markets on the agenda again.     

The Law's Markets

Recent research has suggested that one of the key ways in which economics and cognate calculative discourses and practices ‘perform’ the economy is through the drawing of conceptual boundaries between economic activities and entities of various sorts. One such boundary is the boundary between markets. This article shows that a critical contemporary arena for the differentiation of one product or service market from another is competition (or antitrust) law, which, through its work of market definition, seeks to identify the boundaries of competition: the location of the borders between meaningful economic spaces within which buyers and sellers encounter one another and establish prices. The article argues that in envisioning markets (‘the law's markets’), competition law simultaneously constitutes markets, and it demonstrates this through an empirical examination of the exercise of such law in three economic sectors: insurance, grocery retailing, and pay-television. It also shows, however, that competition law is perennially dogged by conflict – both over the placement of such conceptual boundaries, and over the very process of placement and the status of the market boundary itself – and that its application and effects can only be understood in this light.