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The effects of gallery and artist reputation on prices in the primary market for art: a note

Schönfeld, Susanne and Reinstaller, Andreas (2005) The effects of gallery and artist reputation on prices in the primary market for art: a note. Department of Economics Working Paper Series, 90. Inst. für Volkswirtschaftstheorie und -politik, WU Vienna University of Economics and Business, Vienna.

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Abstract

This paper advances a decision theoretical foundation for pricing scripts by means of a simple model of product differentiation implementing the undercut-proof equilibrium concept. We argue that while sociological factors play undoubtedly an important role, economic analysis can complement the insights from economic sociology on pricing in the primary art market. Our model analyzes the effects of the gallery's and the artist's reputation on the price the gallery charges. The results suggest that prices positively correlate with an artist's reputation and negatively correlate with a gallery's reputation. The model may therefore explain the results of recent empirical studies that have led to similar results. (author's abstract)

Item Type: Paper
Keywords: Pricing scripts / art galleries visual arts / undercut proof equilibrium
Classification Codes: JEL Z11, L11
Divisions: Departments > Volkswirtschaft
Depositing User: Repository Administrator
Date Deposited: 10 Oct 2005 11:55
Last Modified: 18 Mar 2012 03:06
URI: http://epub.wu.ac.at/id/eprint/342

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