Art Market Inefficiency
Geraldine David (),
Kim Oosterlinck () and
No 13-011, Working Papers CEB from ULB -- Universite Libre de Bruxelles
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: G14 Z11 G12 D44 D84 (search for similar items in EconPapers)
Pages: 7 p.
New Economics Papers: this item is included in nep-cul
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Journal Article: Art market inefficiency (2013)
Working Paper: Art Market Inefficiency (2013)
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Persistent link: https://EconPapers.repec.org/RePEc:sol:wpaper:2013/140325
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