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Price and death: modeling the death effect in art price formation

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  • Itaya, Jun-ichi
  • Ursprung, Heinrich W.

Abstract

How does an artist׳s death impact on the price of her works of art? We investigate this question by analyzing a Stackelberg differential game played by an artist and a continuum of collectors. Employing the “piecewise open-loop strategy” concept, we find that the art price remains at some well-defined “pseudo-competitive” level as long as the artist is alive. When the artist unexpectedly dies, the price increases on impact. This so-called death effect varies negatively with the artist׳s age at death.

Suggested Citation

  • Itaya, Jun-ichi & Ursprung, Heinrich W., 2016. "Price and death: modeling the death effect in art price formation," Research in Economics, Elsevier, vol. 70(3), pages 431-445.
  • Handle: RePEc:eee:reecon:v:70:y:2016:i:3:p:431-445
    DOI: 10.1016/j.rie.2016.07.005
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    References listed on IDEAS

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    Cited by:

    1. Federico Etro & Elena Stepanova, 2017. "Art Auctions and Art Investment in the Golden Age of British Painting," Scottish Journal of Political Economy, Scottish Economic Society, vol. 64(2), pages 191-225, May.
    2. Etro, Federico, 2017. "Research in economics and game theory. A 70th anniversary," Research in Economics, Elsevier, vol. 71(1), pages 1-7.

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