 Reading between the lines in the art market: Lack of transparency and price heterogeneity as an indicator of multiple equilibriaJuan Prieto-Rodriguez () and Marilena Vecco Economic Modelling, 2021, vol. 102, issue C Abstract: The hypothesis of a single deterministic price structure in the art market is unrealistic because of price dispersion, heterogeneity, limited information, and a lack of price transparency. Considerable price heterogeneity is associated with differences in quality; however, objective measurement of artistic quality is difficult, which reinforces the problem of lack of transparency in the art market. Applying finite mixture models to a sample of Surrealism paintings sold at auctions during 1990–2007, we test the hypothesis that the art market's lack of transparency is transferred to the art price system, which results in a fragmented market, characterized by the coexistence of different segments with various informational requirements, rules, and prices. Indeed, we find three distinct segments in the high end of the market, each with its own price structure. Furthermore, we identify a direct and an indirect effect on hammer prices exerted by the leading art auction houses. Keywords: Art price heterogeneity; Finite mixture model; Art auctions; Price dispersion; Market segments (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:ecmode:v:102:y:2021:i:c:s0264999321001760 DOI: 10.1016/j.econmod.2021.105587 Access Statistics for this article Economic Modelling is currently edited by S. Hall and P. Pauly More articles in Economic Modelling from Elsevier |
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