Essays on Economics of the Arts
2017
In the recent years, a vast number of economic studies
focused on the art market and on its development,
as well as on the artists as agents of a labour
market with features that are particular of art market.
However, really few studies analyzed the functioning
of the art market as a whole with a theoretical
approach, often considering the artist as nothing
more than a simple producer of artworks. This
dissertation aims to enrich the economics literature
with the above-mentioned missing parts.
In Chapter 2 we build a model for studying the price
formation in the private art market in a context of
complete information and full rationality, using a
game theory approach. In this first part, the key
variables in this market are the market powers of
the agents in the market, that define what is the
channel through which a certain artwork reaches
the public market. Chapter 3 firstly better defines
what are the economic and cultural values and how
their formation works for artworks, and then it introduces
in the just-created framework the effects
of information asymmetry among the agents operating
in the market, and behavioural aspects in the
choices of some of them: besides market powers,
also information has a key role in the art market,and it mainly depends on artists’ characteristics, as
fame and talent. Chapter 4 empirically investigates
these artists’ characteristics, creating a new measure
for them, through the use of hedonic regression and
quantile hedonic regression, finding that this measure
presents a bimodal distribution in all the specifications
we implemented, coherently with the superstar
theory in the art market, and that there exist
various effects than influence the ranking created
using our measure.
Chapter 2
Chapter 2 analyses the pricing of artworks just created
by an artist and sold for the first time in the
art market, investigating the price-formation mechanism
at work in the private art market. In particular,
a game theory approach is used to consider the
possible channels (paths) that a new artwork can
take to reach a collector or an auction house, assuming
price-maximizing agents with full information
on market powers and reserve prices. The study is
aimed to identify the relationships between the artwork
prices and the market power of agents operating
in each channel of the market. What we find
is that the market power of each of the agents is key
to identify the market channel that will be preferred
by the artist and, then, her incentive in creating a
new artwork. At the same time, the importance of
art market intermediaries as the galleries in the formation of art prices is attested and their incentives
to enter and remain in the market are confirmed.
Chapter 3
Chapter 3 aims to explore the role of cultural and
economic value, and of the information on private
art market price formation; in this Chapter, we develop
a bargaining game model in which we explicitly
consider the effects of these issues. Furthermore,
we introduce artists’ fame and talent as determinants
of an artwork’s cultural and economic
value. Assuming artists, galleries, and collectors
have different levels of information on the quality of
the artworks and on the characteristics of the artists,
we study the behaviour of these agents and the potential
emergence of disappointment for the sophisticated
collectors and undertreatment for the unsophisticated
ones. Artworks will be treated as credence
goods, experience goods, or search goods, depending
on the level of information each agent has
at his disposal; this influences the way the price is
formed and how the surplus of the trade is shared
among the agents in certain particular trade channels.
Chapter 4
In Chapter 4, we aim to empirically analyze those
characteristics of the artists that influence cultural and economic values, in order to understand how
the art market considers them in the formation of
prices. To do so, using a unique hand-collected dataset
from the Artist Re-sale Rights (ARR) archives of
the Societ`a Italiana degli Autori ed Editori (SIAE),
we build a novel index of artists’ talent and fame in
the Italian art market. The distribution of this measure
and the ranking of the artists’ index is analyzed
in several model specifications, and the dynamics
of the index is also qualitatively studied. Despite of
the existence of a price effect, a time effect, and an
art genre effect, coherently with the superstars theory,
the bimodality of the distribution is confirmed
in all our empirical findings.
Keywords:
- Correction
- Source
- Cite
- Save
- Machine Reading By IdeaReader
0
References
0
Citations
NaN
KQI