Title: Market evolution, bidding strategies, and survival of art dealers
Authors: Marina Gertsberg - University of Maastricht (Netherlands) [presenting]
Rachel Pownall - Maastricht University (Netherlands)
Daskhina De Silva - Lancaster University (United Kingdom)
Abstract: The evolution of theLondon-based fine-art dealers is studied and effects of asymmetric information is analyzed on their bidding and survival patterns during 1800-1913. While dealers captured about 17\% of the total purchases between 1800 and 1850, the share increased to about 56\% during 1850-1913. First, we show that dealers entered the market as the number of paintings traded and population increased. Next, we examine whether the experience of an art dealer can explain the differences in the acquisition or bidding strategies. We show that more experienced dealers payabout 23\% more for an artwork of the same quality than inexperienced dealers. This price difference can be attributed to the informational advantage of experienced bidders. Additionally, our results indicate that less experienced dealers are less likely to survive in the market. Our evidence supports the conjecture that common value auctions with information asymmetries offer benefits to bidders with better information.