Market Evolution, Bidding Strategies, and Survival of Art Dealers
Dakshina De Silva (),
Marina Gertsberg and
Rachel Pownall ()
No 138739557, Working Papers from Lancaster University Management School, Economics Department
We show the value of expertise during the evolution of a market characterized by asymmetric information. Using a unique historical data set, we show how market dynamics encourage entrants. Our results provide evidence that better informed dealers pay about 24% more for an artwork of the same quality than less informed dealers. Additionally, our results indicate that informed dealers are more likely to survive in the market. Our evidence supports the conjecture that, in common value auctions, when information asymmetries are present, dealers with better information benefit. These results have important implications for maintaining and sustaining competitive advantage.
Keywords: Auctions; Bidding; Art Dealers; Market Evolution; Common value (search for similar items in EconPapers)
JEL-codes: C57 D44 Z11 D47 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cul
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