Failure to Meet the Reserve Price: The Impact on Returns to Art
This 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.
|Date of creation:||Sep 2006|
|Date of revision:|
|Contact details of provider:|| Postal: Centre for Economic Policy Research, 77 Bastwick Street, London EC1V 3PZ.|
Phone: 44 - 20 - 7183 8801
Fax: 44 - 20 - 7183 8820
|Order Information:|| Email: |
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Orley Ashenfelter & Kathryn Graddy, 2003.
"Auctions and the Price of Art,"
Journal of Economic Literature,
American Economic Association, vol. 41(3), pages 763-787, September.
- Victor Ginsburgh & Pierre-Michel Menger, 1996.
"Economics of the arts: selected essays,"
ULB Institutional Repository
2013/1655, ULB -- Universite Libre de Bruxelles.
- Steven D. Levitt & Chad Syverson, 2005.
"Market Distortions when Agents are Better Informed: The Value of Information in Real Estate Transactions,"
NBER Working Papers
11053, National Bureau of Economic Research, Inc.
- Steven D. Levitt & Chad Syverson, 2008. "Market Distortions When Agents Are Better Informed: The Value of Information in Real Estate Transactions," The Review of Economics and Statistics, MIT Press, vol. 90(4), pages 599-611, November.
- Genesove, D. & Mayer, C.J., 1994.
"Equity and Time to Sale in the Real Estate Market,"
94-02, Massachusetts Institute of Technology (MIT), Department of Economics.
- David Genesove & Christopher J. Mayer, 1993. "Equity and time to sale in the real estate market," Working Papers 93-6, Federal Reserve Bank of Boston.
- David Genesove & Christopher J. Mayer, 1994. "Equity and Time to Sale in the Real Estate Market," NBER Working Papers 4861, National Bureau of Economic Research, Inc.
- Anderson, Robert C, 1974. "Paintings as an Investment," Economic Inquiry, Western Economic Association International, vol. 12(1), pages 13-26, March.
- Ashenfelter, Orley, 1989. "How Auctions Work for Wine and Art," Journal of Economic Perspectives, American Economic Association, vol. 3(3), pages 23-36, Summer.
- Victor Ginsburgh & David Throsby, 2006.
"Handbook of the economics of art and culture,"
ULB Institutional Repository
2013/1673, ULB -- Universite Libre de Bruxelles.
- Goetzmann, W.N., 1990.
"The Accuracy Of Real Estimate Indices: Repeat Sale Estimators,"
fb-_90-17, Columbia - Graduate School of Business.
- Goetzmann, William Nelson, 1992. "The Accuracy of Real Estate Indices: Repeat Sale Estimators," The Journal of Real Estate Finance and Economics, Springer, vol. 5(1), pages 5-53, March.
- 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.
- Luc BAUWENS & Victor GINSBURGH, 2000.
"Art experts and auctions Are pre-sale estimates unbiased and fully informative?,"
Discussion Papers (REL - Recherches Economiques de Louvain)
2000022, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
- 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.
- BAUWENS, Luc & GINSBURGH, Victor, . "Art experts and auctions are pre-sale estimates unbiased and fully informative?," CORE Discussion Papers RP 1485, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- Pesando, James E, 1993. "Art as an Investment: The Market for Modern Prints," American Economic Review, American Economic Association, vol. 83(5), pages 1075-89, December.
- Orley Ashenfelter & Kathryn Graddy, 2010.
1212, Princeton University, Department of Economics, Center for Economic Policy Studies..
- Orley Ashenfelter & Kathryn Graddy, 2011. "Art Auctions," Chapters, in: A Handbook of Cultural Economics, Second Edition, chapter 2 Edward Elgar Publishing.
- Graddy, Kathryn, 2006. "Art Auctions," Handbook of the Economics of Art and Culture, Elsevier.
- Orley Ashenfelter, 2003. "Art auctions," Chapters, in: A Handbook of Cultural Economics, chapter 3 Edward Elgar Publishing.
- Paul Klemperer, 2004.
"Auctions: Theory and Practice,"
Economics Series Working Papers
2004-W09, University of Oxford, Department of Economics.
- 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.
- Goetzmann, William N, 1993. "Accounting for Taste: Art and the Financial Markets over Three Centuries," American Economic Review, American Economic Association, vol. 83(5), pages 1370-76, December.
When requesting a correction, please mention this item's handle: RePEc:cpr:ceprdp:5811. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ()
If references are entirely missing, you can add them using this form.