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Anatomy of the Rise and Fall of a Price-Fixing Conspiracy: Auctions at Sotheby's and Christie's

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  • Orley Ashenfelter
  • Kathryn Graddy

Abstract

The Sotheby's/Christie's price-fixing scandal that ended in the public trial of Alfred Taubman provides a unique window on a number of key economic and antitrust policy issues related to the use of the auction system. The trial provided detailed evidence as to how the price fixing worked, and the economic conditions under which it was started and began to fall apart. The outcome of the case also provides evidence on the novel auction process used to choose the lead counsel for the civil settlement. Finally, though buyers received the bulk of the damages, a straightforward application of the economic theory of auctions shows that it is unlikely that successful buyers as a group were injured.

Suggested Citation

  • Orley Ashenfelter & Kathryn Graddy, 2004. "Anatomy of the Rise and Fall of a Price-Fixing Conspiracy: Auctions at Sotheby's and Christie's," NBER Working Papers 10795, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:10795
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    References listed on IDEAS

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    Cited by:

    1. Orley Ashenfelter & Kathryn Graddy, 2011. "Art Auctions," Chapters, in: Ruth Towse (ed.),A Handbook of Cultural Economics, Second Edition, chapter 2, Edward Elgar Publishing.
    2. 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.
    3. Joseph E. Harrington, Jr, 2006. "How Do Cartels Operate?," Economics Working Paper Archive 531, The Johns Hopkins University,Department of Economics.
    4. Loertscher, Simon & Niedermayer, Andras, 2020. "Entry-deterring agency," Games and Economic Behavior, Elsevier, vol. 119(C), pages 172-188.
    5. Marleen Marra, 2019. "Pricing and Fees in Auction Platforms with Two-Sided Entry," Sciences Po Economics Discussion Papers 2020-02, Sciences Po Departement of Economics.
    6. Samdanis, Marios & Lee, Soo Hee, 2019. "Uncertainty, strategic sensemaking and organisational failure in the art market: What went wrong with LVMH's investment in Phillips auctioneers?," Journal of Business Research, Elsevier, vol. 98(C), pages 475-488.
    7. Marleen Marra, 2019. "Pricing and Fees in Auction Platforms with Two-Sided Entry," Sciences Po publications 2020-02, Sciences Po.

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    More about this item

    JEL classification:

    • D44 - Microeconomics - - Market Structure, Pricing, and Design - - - Auctions
    • K21 - Law and Economics - - Regulation and Business Law - - - Antitrust Law
    • L41 - Industrial Organization - - Antitrust Issues and Policies - - - Monopolization; Horizontal Anticompetitive Practices

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