Failure to Meet the Reserve Price: The Impact on Returns to Art
AbstractThis paper presents an empirical study of paintings that have failed to meet their reserve price at auction. In the art trade it is often claimed that when an advertised item goes unsold at auction, its future value will be affected. We have constructed a new dataset specifically for the purpose of testing this proposition. To preview our results, we find that paintings that come to auction and failed return significantly less when they are eventually sold than those paintings that have not been advertised at auction between sales. These lower returns may occur because of common value effects, idiosyncratic downward trends in tastes, or changes in the seller's reserve price.
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Bibliographic InfoPaper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 5811.
Date of creation: Sep 2006
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Other versions of this item:
- Alan Beggs & Kathryn Graddy, 2008. "Failure to meet the reserve price: the impact on returns to art," Journal of Cultural Economics, Springer, vol. 32(4), pages 301-320, December.
- Alan Beggs & Kathryn Graddy, 2006. "Failure to Meet the Reserve Price: The Impact on Returns to Art," Economics Series Working Papers 272, University of Oxford, Department of Economics.
- D44 - Microeconomics - - Market Structure and Pricing - - - Auctions
- L82 - Industrial Organization - - Industry Studies: Services - - - Entertainment; Media
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