Peer effects in art prices

Marchenko, Maria (2020) Peer effects in art prices. Department of Economics Working Paper Series, 298. WU Vienna University of Economics and Business, Vienna.

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Abstract

Art often serves as an investment tool. However, the prices for some of the pieces are not easy to predict, and removing the price uncertainty is crucial to attracting even more investment in the art market. This paper assumes that the reputation of the artists and their social connections can play a significant role in determining the prices of their work. I check if a link to a higher valued or more famous peer has a positive effect on the prices of art pieces and on the probability of a successful sale. To test this hypothesis, I use the network of abstract artists, whose works' value is not always straightforward determined, and the prices of their works auctioned in 2000-2015 at Sotheby's, one of the most significant art and collectibles brokers in the world. The results suggest that consumers are willing to pay more for a particular artist's work, once there is a connection between the artist and a more valuable set of peers. However, the probability of sale is not affected. The auctioneer's predictions about future prices exhibit a similar trend.

Item Type: Paper
Keywords: peer effects, art prices, art market
Classification Codes: JEL C49, D44, D85, Z11
Divisions: Departments > Volkswirtschaft
Depositing User: Claudia Tering-Raunig
Date Deposited: 03 Jun 2020 15:57
Last Modified: 03 Jun 2020 15:57
URI: https://epub.wu.ac.at/id/eprint/7620

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