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Price and death: modeling the death effect in art price formation

Jun-ichi Itaya () and Heinrich Ursprung ()

Research in Economics, 2016, vol. 70, issue 3, 431-445

Abstract: How does an artist׳s death impact on the price of her works of art? We investigate this question by analyzing a Stackelberg differential game played by an artist and a continuum of collectors. Employing the “piecewise open-loop strategy” concept, we find that the art price remains at some well-defined “pseudo-competitive” level as long as the artist is alive. When the artist unexpectedly dies, the price increases on impact. This so-called death effect varies negatively with the artist׳s age at death.

Keywords: Art prices; Durable-goods monopoly; Stackelberg equilibrium (search for similar items in EconPapers)
Date: 2016
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Handle: RePEc:eee:reecon:v:70:y:2016:i:3:p:431-445