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

Author

Listed:
  • 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.

Suggested Citation

  • Calin Valsan & Robert Sproule, 2008. "Reservation Prices And Pre-Auction Estimates: A Study In Abstract Art," The AMFITEATRU ECONOMIC journal, Academy of Economic Studies - Bucharest, Romania, vol. 10(24), pages 257-272, June.
  • Handle: RePEc:aes:amfeco:v:10:y:2008:i:24:p:257-272
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    References listed on IDEAS

    as
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    4. Orley Ashenfelter & Kathryn Graddy, 2011. "Art Auctions," Chapters,in: A Handbook of Cultural Economics, Second Edition, chapter 2 Edward Elgar Publishing.
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    5. Victor Ginsburgh & David Throsby, 2006. "Handbook of the Eonomics of Art and Culture," ULB Institutional Repository 2013/152412, ULB -- Universite Libre de Bruxelles.
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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.

    More about this item

    Keywords

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

    JEL classification:

    • D44 - Microeconomics - - Market Structure, Pricing, and Design - - - Auctions
    • G12 - Financial Economics - - General Financial Markets - - - Asset Pricing; Trading Volume; Bond Interest Rates
    • Z11 - Other Special Topics - - Cultural Economics - - - Economics of the Arts and Literature

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