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Experience and Brokerage in Asset Markets: Evidence from Art Auctions

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  • Bruno, Brunella
  • Garcia-Appendini, Emilia
  • Nocera, Giacomo

Abstract

Focusing on the art market, where auction houses act as brokers between art sellers and buyers, we investigate whether more experienced brokers achieve better performance as information providers. We use a unique data set of auctions of Italian paintings in various houses around the world, and we measure experience as the number of times an auctioneer has auctioned the artworks of a certain artist in a given location. We find that more experienced auction houses (i) are more likely to sell and (ii) provide more precise pre-sale estimates. These findings suggest that experience plays an important role for brokers to reduce illiquidity and opacity in markets with asymmetric information.

Suggested Citation

  • Bruno, Brunella & Garcia-Appendini, Emilia & Nocera, Giacomo, 2016. "Experience and Brokerage in Asset Markets: Evidence from Art Auctions," Working Papers on Finance 1605, University of St. Gallen, School of Finance.
    • Handle: RePEc:usg:sfwpfi:2016:05
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    Cited by:

    1. Renée B Adams & Roman Kräussl & Marco Navone & Patrick Verwijmeren & Stijn Van Nieuwerburgh, 2021. "Gendered Prices [Can culture affect prices? A cross-cultural study of shopping and retail prices]," Review of Financial Studies, Society for Financial Studies, vol. 34(8), pages 3789-3839.
      • Renée B Adams & Roman Kräussl & Marco Navone & Patrick Verwijmeren, 2021. "Gendered Prices," Published Paper Series 2021-4, Finance Discipline Group, UTS Business School, University of Technology, Sydney.
    2. Régis Blazy & Marie Blum, 2022. "Horizontal and vertical differentiation in comic art auctions," Economic Inquiry, Western Economic Association International, vol. 60(3), pages 1382-1415, July.
    3. William N Goetzmann & Christophe Spaenjers & Stijn Van Nieuwerburgh, 2021. "Real and Private-Value Assets [Gendered prices]," The Review of Financial Studies, Society for Financial Studies, vol. 34(8), pages 3497-3526.
    4. Adams, Renée & Kräussl, Roman & Navone, Marco & Verwijmeren, Patrick, 2018. "Is gender in the eye of the beholder? Identifying cultural attitudes with art auction prices," CFS Working Paper Series 595, Center for Financial Studies (CFS).
    5. Milad Nozari, 2022. "Investment horizon for private‐value assets: Evidence from the art market," Journal of Financial Research, Southern Finance Association;Southwestern Finance Association, vol. 45(2), pages 229-246, June.

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    More about this item

    Keywords

    Brokerage; information; experience; art auctions;
    All these keywords.

    JEL classification:

    • G24 - Financial Economics - - Financial Institutions and Services - - - Investment Banking; Venture Capital; Brokerage
    • D44 - Microeconomics - - Market Structure, Pricing, and Design - - - Auctions
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • Z11 - Other Special Topics - - Cultural Economics - - - Economics of the Arts and Literature

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