IDEAS home Printed from https://ideas.repec.org/a/cem/jaecon/v19y2016n2p219-248.html
   My bibliography  Save this article

Pricing genius: The market evaluation of innovation

Author

Listed:
  • David W. Galenson

    (University of Chicago and Universidad del CEMA)

  • Simone Lenzu

    (University of Chicago)

Abstract

Economists have neglected a key issue for understanding and increasing technological change, in failing to study how talented individuals produce innovations. This paper takes a quantitative approach to this problem. Regression analysis of auction data from 1965-2015 reveals that the age-price profiles of Jackson Pollock and Andy Warhol – the two greatest painters born in the 20th century – closely resemble the profiles of the two artists’ careers derived both from textbooks of art history and from retrospective exhibitions. The agreement of these sources confirms that the auction market assigns the highest prices to the art that scholars judge to be the most important, and examination of the artists’ careers reveals that this art is the most important because it is the most innovative. These results lend strong support to our understanding of creativity at the individual level, with a sharp contrast between the extended experimental innovation of Pollock and the sudden conceptual innovation of Warhol.

Suggested Citation

  • David W. Galenson & Simone Lenzu, 2016. "Pricing genius: The market evaluation of innovation," Journal of Applied Economics, Universidad del CEMA, vol. 19, pages 219-248, November.
    • Handle: RePEc:cem:jaecon:v:19:y:2016:n:2:p:219-248
    as

    Download full text from publisher

    File URL: https://ucema.edu.ar/publicaciones/download/volume19/galenson.pdf
    File Function: Paper
    Download Restriction: no
    ---><---

    Other versions of this item:

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Kathryn Graddy & Carl Lieberman, 2018. "Death, Bereavement, and Creativity," Management Science, INFORMS, vol. 64(10), pages 4505-4514, October.
    2. Galenson, David W., 2018. "Pricing revolution: From abstract expressionism to pop art," Research in Economics, Elsevier, vol. 72(1), pages 86-100.
    3. Alexander Cuntz & Matthias Sahli, 2023. "Ars longa, vita brevis: The death of the creator and the impact on exhibitions and auction markets," WIPO Economic Research Working Papers 76, World Intellectual Property Organization - Economics and Statistics Division.

    More about this item

    Keywords

    creativity; technological change; hedonic regression analysis; life cycles;
    All these keywords.

    JEL classification:

    • J01 - Labor and Demographic Economics - - General - - - Labor Economics: General
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • O30 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - General

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:cem:jaecon:v:19:y:2016:n:2:p:219-248. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Valeria Dowding (email available below). General contact details of provider: https://edirc.repec.org/data/cemaaar.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.