Art Market Inefficiency

Geraldine David, Kim Oosterlinck and Ariane Szafarz

No 13-011, Working Papers CEB from ULB -- Universite Libre de Bruxelles

Abstract: Art is often used as an investment vehicle. Given the importance of market efficiency in finance, we use a large auction-based index to test whether the art market is weakly efficient. Evidence reveals that returns on artworks exhibit high positive auto-correlation. We attribute this result to price truncation resulting from unobservable reserve prices in auctions. We conclude that the art market is not efficient, mainly because price formation is opaque to outsiders who lack information on unsold artworks.

Keywords: Art Market; Market Efficiency; Auction; Random Walk; Reserve Price (search for similar items in EconPapers)
JEL-codes: D44 D84 G12 G14 Z11 (search for similar items in EconPapers)
Pages: 7 p.
Date: 2013-02-11
New Economics Papers: this item is included in nep-cul
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (30)

Published by:

Downloads: (external link)
https://dipot.ulb.ac.be/dspace/bitstream/2013/140325/1/wp13011.pdf wp13011 (application/pdf)

Related works:
Journal Article: Art market inefficiency (2013)
Working Paper: Art Market Inefficiency (2013)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:sol:wpaper:2013/140325

Ordering information: This working paper can be ordered from
http://hdl.handle.ne ... lb.ac.be:2013/140325

Access Statistics for this paper

More papers in Working Papers CEB from ULB -- Universite Libre de Bruxelles Contact information at EDIRC.
Bibliographic data for series maintained by Benoit Pauwels ().