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Reservation Prices And Pre-Auction Estimates: A Study In Abstract Art

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  • Calin Valsan

    ()
    (Bishop’s University, Lennoxville, Quebec)

  • Robert Sproule

    ()
    (Bishop’s University, Lennoxville, Quebec)

Abstract

Using a sample of European abstract art we show that reservation prices constrain pre-auction estimates in such a way that we are more likely to observe overestimation relative to the midpoint of the estimation window. At the same time, we also find that the low pre-auction estimate is a more powerful, accurate and precise predictor of hammer prices than the high estimate.

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File URL: http://www.amfiteatrueconomic.ase.ro/arhiva/pdf/no24/articol_fulltext_pag257.pdf
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Bibliographic Info

Article provided by Academy of Economic Studies - Bucharest, Romania in its journal The AMFITEATRU ECONOMIC journal.

Volume (Year): 10 (2008)
Issue (Month): 24 (June)
Pages: 257-272

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Handle: RePEc:aes:amfeco:v:10:y:2008:i:24:p:257-272

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Related research

Keywords: Art Auctions; Abstract Art; Pre-auction Estimates; Reservation Price; Bias;

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References

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  1. Jianping Mei & Michael Moses, 2005. "Vested Interest and Biased Price Estimates: Evidence from an Auction Market," Journal of Finance, American Finance Association, vol. 60(5), pages 2409-2435, October.
  2. Orley Ashenfelter & Kathryn Graddy, 2010. "Art Auctions," Working Papers 1212, Princeton University, Department of Economics, Center for Economic Policy Studies..
  3. repec:ltr:wpaper:2001.05 is not listed on IDEAS
  4. Alan Beggs & Kathryn Graddy, 1997. "Declining Values and the Afternoon Effect: Evidence from Art Auctions," RAND Journal of Economics, The RAND Corporation, vol. 28(3), pages 544-565, Autumn.
  5. Ashenfelter, Orley C & Graddy, Kathryn, 2004. "Anatomy of the Rise and Fall of a Price-Fixing Conspiracy: Auctions at Sotheby's and Christie's," CEPR Discussion Papers 4662, C.E.P.R. Discussion Papers.
  6. Victor Ginsburgh & Pierre-Michel Menger, 1996. "Economics of the Arts: Selected essays," ULB Institutional Repository 2013/152420, ULB -- Universite Libre de Bruxelles.
  7. Victor Ginsburgh & David Throsby, 2006. "Handbook of the Eonomics of Art and Culture," ULB Institutional Repository 2013/152412, ULB -- Universite Libre de Bruxelles.
  8. Michael Beckmann, 2004. "Why Do Sellers At Auctions Bid For Their Own Items? Theory And Evidence," Schmalenbach Business Review (sbr), LMU Munich School of Management, vol. 56(4), pages 312–337, October.
  9. Paul Milgrom & Robert J. Weber, 1981. "A Theory of Auctions and Competitive Bidding," Discussion Papers 447R, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
  10. Victor Ginsburgh & Luc Bauwens, 2000. "Art experts and auctions :are pre-sale estimates unbiased and fully informative," ULB Institutional Repository 2013/152099, ULB -- Universite Libre de Bruxelles.
  11. Chanel, O. & Gerard-Varet, L.A., 1996. "Auction Theory and Practice Evidence from the Market for Jewellery," G.R.E.Q.A.M. 96b05, Universite Aix-Marseille III.
  12. Clare M D'Souza & David Prentice, 2001. "Auctioneer Strategy and Pricing: Evidence from an Art Auction," Working Papers 2001.05, School of Economics, La Trobe University.
  13. Ashenfelter, Orley, 1989. "How Auctions Work for Wine and Art," Journal of Economic Perspectives, American Economic Association, vol. 3(3), pages 23-36, Summer.
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Cited by:
  1. Marinelli, Nicoletta & Palomba, Giulio, 2011. "A model for pricing Italian Contemporary Art paintings at auction," The Quarterly Review of Economics and Finance, Elsevier, vol. 51(2), pages 212-224, May.

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