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Evolution of a dealer trading network and its effects on art auction prices

Dakshina De Silva (), Marina Gertsberg, Georgia Kosmopoulou and Rachel A.J. Pownall

European Economic Review, 2022, vol. 144, issue C

Abstract: We use a unique historical data set (1741-1913) of all London-based art auctions to capture the role of information acquisition in the development of a trading network for dealers and its effect on artwork prices. We explore how the network size, depth of interactions, and similarities in art specialization between trading partners influence the decision to form new links. We find that, a larger and deeper trading network exacerbates informational asymmetries among buyers, leading to a price advantage. We show that information transmission through a network of experienced dealers is important in determining the price they pay - a factor that has been overlooked so far in the literature.

Keywords: Auctions; Art dealers; Trading networks (search for similar items in EconPapers)
JEL-codes: D44 D82 L14 (search for similar items in EconPapers)
Date: 2022
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DOI: 10.1016/j.euroecorev.2022.104083

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European Economic Review is currently edited by T.S. Eicher, A. Imrohoroglu, E. Leeper, J. Oechssler and M. Pesendorfer

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