The market reception of ‘new connoisseurship’

This chapter examines the relationships between art scholarship and the art market by focusing on the effects of recent scientific advances on the economic value of old masters. The renewed interest in copies these past decades has indeed mitigated the importance of the master’s name which, nonetheless, remains a significant pricing determinant that affects the perception and consumption of the arts. Based on Pieter II Brueghel’s sale, both auction house’s discourse and the buyers’ willingness to pay for autograph and non-autograph paintings are considered to see whether this market segment has emancipated from the quest for authorship. Empirical evidence shows that auction houses still focus on the artist’s name above all, and nurture an outdated vision of art that is no longer supported by scholars.

A műkereskedelem hazánkban mindmáig a kiskereskedelem kevésbé feltárt szegmensei közé tartozik. Ugyanakkor a téma aktualitását igazolja, hogy bizonyos társadalmi rétegek jelentős összegeket fordítanak műtárgyak vásárlására és fektetik be felhalmozott jövedelmük egy részét antik és kortárs vagyontárgyakba. A műtárgypiacon számos galéria, aukciósház és régiségbolt jelenik meg, és az antikváriumok is fontos résztvevőknek tekinthetők.Jelen tanulmány célja a budapesti műkereskedelem klasszifikációja és térbeli sajátosságainak bemutatása. A primer adatgyűjtésre épülő kutatás a fővárosi műkereskedéseket vizsgálja, saját terepi megfigyelésekkel és félig strukturált interjúk elkészítésével. Az üzletek és kereskedőházak elhelyezkedésének megjelenítése és elemzése térinformatikai szoftver alkalmazásával történt.A műtárgypiac szereplői különböző típusokba sorolhatóak a profil, az értékesítés helye, az árpolitika és a kínálat alapján. Megfigyelhető, hogy a galériák és aukciósházak Budapest legelegánsabb hagyományos bevásárlónegyedében helyezkednek el, a másodlagos bevásárlózóna jellemzően az antikváriumoknak és a régiségboltoknak ad otthont. Az egyes típusok térbeli elkülönülése számos tényezővel magyarázható: a bérleti díjak nagyságával, történeti előzményekkel, agglomerációs előnyökkel.

Objective: The objective of this thesis is to explore the art investment strategies of family offices, focusing on their interactions with the art industry including artists, museums, galleries, and auction houses. The aim is to understand how these offices develop investment decisions that go beyond current market trends by integrating economic intelligence with cultural insights. This research provides practical guidance for family offices in art investment, fostering smarter, future-oriented market decisions while contributing to the art market's growth and cultural diversity preservation. Theoretical Framework:The theoretical framework of the thesis examines the evolution of family offices and their role in art investment, analyzing the dynamics and trends of the art market, the complexities of art investment including risks and rewards, and the importance of understanding art's value beyond economic terms. This framework sets the stage to explore how family offices balance financial goals with cultural and artistic appreciation in their investment strategies. Method：The methodology of the study employs a qualitative case study approach, focusing on the Cohen Family Office to explore decision-making processes and art value perceptions in family offices. Data is gathered from public sources, industry reports, and relevant literature, particularly regarding the Cohen Family Office's art investments. This analysis aims to understand how art investment decisions are influenced by art value perceptions and market dynamics within this specific family office. Results and Discussion: The study's results reveal that the Cohen Family Office demonstrates a profound understanding of art value, which influences their successful investment strategies, including strategic acquisitions and support of emerging artists. Their active engagement in the art industry enhances their investment decisions and art value perception. The office's approach balances artistic appreciation with financial planning, leading to significant cultural and economic impacts. The research highlights differences between personal family collections and strategically driven family office collections, emphasizing the latter's focus on long-term financial and cultural goals. Research Implications:The research offers valuable insights for family offices in art investment,emphasizing the importance of deep art value perception and strategic market engagement. It highlights how family offices can surpass market trends through informed decision-making, balancing economic and cultural values. The study contributes to a broader understanding of art market dynamics and family office roles, enhancing strategies for wealth management and cultural legacy preservation. Originality/Value:The originality and value of this thesis lie in its unique focus on family offices in art investment, providing a detailed case study approach and highlighting the importance of art value perception. This research offers fresh insights into combining cultural enrichment with financial acumen in art investment strategies, contributing significantly to the understanding of family offices’ roles in art market dynamics and the interplay between cultural legacy and wealth management.

NFTs and Digital Art

The editorial premise of this special issue is that the adage ‘art and money do not mix’ is now wholly untenable. As detailed in our extended interview with Clare McAndrew, the art market has grown rapidly over the last twenty years, leading to systemic and structural changes in the art field. For some, this growth of the market and its significance for art is an institutional misfortune that, for all of its effects, is nonetheless inconsequential to the normative claim that art and money shouldn't mix. This commonplace premise looks to keep the sanctity or romance of art from the business machinations of market mechanisms, as eloquently summarised by Oscar Wilde's definition of cynicism (‘knowing the price of everything and the value of nothing’). This issue repudiates that normative moral code, and precisely for the reasons just stated: by now, the interests of the art market permeate all the way through the art system. The interests of the art market shape what is exhibited and where; what kinds of discourse circulate around which art (or even as art) and in what languages; and what, in general, is understood to count as art. In short, the art market - comprising mainly of collectors, galleries and auction houses - is now the primary driver in what is valuable in art.

The editorial premise of this special issue is that the adage ‘art and money do not mix’ is now wholly untenable. As detailed in our extended interview with Clare McAndrew, the art market has grown rapidly over the last twenty years, leading to systemic and structural changes in the art field. For some, this growth of the market and its significance for art is an institutional misfortune that, for all of its effects, is nonetheless inconsequential to the normative claim that art and money shouldn’t mix. This commonplace premise looks to keep the sanctity or romance of art from the business machinations of market mechanisms, as eloquently summarised by Oscar Wilde’s definition of cynicism (‘knowing the price of everything and the value of nothing’). This issue repudiates that normative moral code, and precisely for the reasons just stated: by now, the interests of the art market permeate all the way through the art system. The interests of the art market shape what is exhibited and where; what kinds of discourse circulate around which art (or even as art) and in what languages; and what, in general, is understood to count as art. In short, the art market – comprising mainly of collectors, galleries and auction houses – is now the primary driver in what is valuable in art.

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.

An options-based approach to analyze auction guarantees in the art market

Background literature and market flow data show evidence of an increasingly global art market. In turn, the global art market, instead of being a single, defined entity appears to be made of various local and diverse art markets. These various markets are progressively converging and integrating thanks to logistic and communication circuits. Key actors and organizations in the art market (e.g. auction houses or leader-dealers) see managers and marketers increasingly encountering cultural diversity alongside with economic heterogeneity. This chapter takes into account the not-yet-conceptualized framework of the art market in cross-cultural context. In so doing the author specifically identifies divergences and convergences concerning consumer behavior and art goods in a global economy. The results support the notion that in the current art market cultural diversity influences consumer attitudes. Such evidence may have specific managerial implications for practitioners and may stimulate further empirical studies to enforce this theoretical claim.

Background literature and market flow data show evidence of an increasingly global art market. In turn, the global art market, instead of being a single, defined entity appears to be made of various local and diverse art markets. These various markets are progressively converging and integrating thanks to logistic and communication circuits. Key actors and organizations in the art market (e.g. auction houses or leader-dealers) see managers and marketers increasingly encountering cultural diversity alongside with economic heterogeneity. This chapter takes into account the not-yet-conceptualized framework of the art market in cross-cultural context. In so doing the author specifically identifies divergences and convergences concerning consumer behavior and art goods in a global economy. The results support the notion that in the current art market cultural diversity influences consumer attitudes. Such evidence may have specific managerial implications for practitioners and may stimulate further empirical studies to enforce this theoretical claim.

For the last two decades, the international auction houses Sotheby’s and Christie’s have been at the forefront of global art market expansion. Their world-wide footprints have enabled auction house specialists to engage with emerging artists and aspiring collectors, most notably in the developing economies of the Global South. By establishing their sales infrastructure in new locales ahead of the traditional mechanisms of primary market commercial galleries, the international auction houses have played a foundational role in the notional construction of new genres of art. However, branding alone is not sufficient to establish these new markets; the auction houses require a network of willing supporters to facilitate and drive marketplace supply and demand, be that trans-locational art market intermediaries, local governments, and/or regional auction businesses. This paper examines emerging art auction markets in three Global South case studies. It elucidates the strategic mechanisms and networks of international and regional art auction houses in the development of specific genres of contemporary art: Hong Kong and ‘Chinese contemporary art’, Singapore and ‘Southeast Asian art’, and Australia and ‘Aboriginal art’. Through examination and comparison of these three markets, this paper draws on research conducted over the past decade to reveal an integral role played by art auctions in the expansion of broader contemporary art world infrastructure in the Global South.

Based on the interaction between RMB exchange rate and oil painting auction price, this paper first introduces the current development of art market at home and abroad, and studies the main pricing methods. Then, according to the auction data of China's oil painting market, this paper analyzes the corresponding attributes of works, artists and auction houses to understand the impact of RMB exchange rate on oil painting auction price. At the same time, it analyzes the auction price of realistic oil painting and abstract oil painting in the secondary auction market. According to some expected conclusions set by market common sense, we finally found the evidence of these expected conclusions in the data. For example, the appreciation of RMB exchange rate has its inherent rationality and imperfection to the pricing method according to the size of the area, there are obvious differences between different styles of oil paintings in terms of price and exchange rate levels, top auction houses have obvious premium to their oil paintings, and the change of RMB exchange rate has obvious positive effect on the price of oil paintings. The innovations of this paper are as follows: 1. This paper makes a comparative study on the secondary auction market prices of realistic and abstract oil paintings in the domestic contemporary art market, and discusses the important factors of RMB exchange rate on the auction price. 2. The three-level model is used to analyze and compare the work level, the artist level and the auction agency level, so as to explore the "invisible" rules of the market. 3. Using the method of scoring and rating by people in the auction industry to comprehensively weigh the position of the auction house in the industry, we can achieve excellent results and understand the relative nature of RMB exchange rate on the oil paintings sold by the auction house. The deficiency of this paper is mainly due to the data is not sufficient, data is not rich enough; many problems still exist in the conclusion of the error.

The art market is a system by which the artwork reaches the public - collectors, museums, public institutions. Thus, the artwork becomes “merchandise” and its journey begins in the artist’s workshop and ends by being shown to the public. During centuries, the art market has registered many changes, according to different factors, such as: political regimes, economical and social crises, artistic tastes of the collectors. Until the 16th century, the public of the artwork was the church, the royal families or the aristocracy; in time, the work of art gained a wider audience. At the beginning, the transactions on the art market were made between the artist-producer and the commissioner-buyer. The market evolved and between the artist and the commissioner have interfered other persons or institutions such as the merchant, the dealer, auction houses, galleries. There are collectors in the history of art that started from the idea of making their own collections, building up powerful empires that promote and sell artists and their works. Depending on centuries or historical moments, the “rules of the game” have changed, and the evolution of the art market has led to the evolution of collective and individual perception of the artwork. As the rules and principles of the actual art market begun in Netherlands, in 16th-17th centuries, this article intends to study the historical context that has led to the evolution of the art market.

The article attempts to analyze how digital technologies change the paradigm of management of art market subjects as distributors of cultural content. In particular, the article examines how the transition to digitalization affects access to cultural consumption and the current challenges and opportunities in this new context. The study aims to determine the peculiarities of the management of art market entities, namely museums, in the conditions of digitalization. The paper analyzes the theoretical material of recent years related to new challenges in managing the activities of art market subjects and practical work on the preservation of art objects and the creation of a new generation of museums and cultural centers. It has been established that art markets are also characterized by an ecosystem of actors and institutions that carry out their activities on it, buy works of art and promote them on the market, provide consulting services on this market, and, in general, collectively contribute to the creation of value. It is outlined that the development of digital technologies also significantly influenced the increase in the number of art market participants and the organization of their activities. The ability to create new art forms thanks to technologies such as virtual reality and artificial intelligence is attracting new actors and expanding the horizons of the art market. It has been identified that online channels have become a significant source of new customers for art galleries and auction houses, particularly those operating at lower and mid-tier levels, in addition to their sales role. It has been proven that a significant problem in increasing the efficiency of management of art market subjects in the conditions of digitalization is the formation of new digital thinking at the top management level. A conclusion was made regarding the need to build new interaction mechanisms with different types of consumers, considering their characteristics and new technological possibilities. Keywords: management, subjects of the art market, digitization, business processes.

We usually distinguish between primary and secondary art market. In the primary art market, the contemporary art galleries use (also on the internet) the images reproducing the works of art of the artist, with the artist's consent. In this case, the license is granted on a free basis for the promotion of the works of art by the galleries. In the secondary art market the art professionals (art dealers or auction houses) need the previous written consent of the artist or his estate for the reproduction of the images of the works of art on sale catalogues or on the relevant websites. This license may request the payment of fees to the artists or to the estate. The legal issues concerning the reproduction of contemporary works of art has a relevance on the international art market and opened a debate also in connection with the implementation of the Directive 2001/29/EC of the European Parliament and of the Council of 22 May 2001 on the harmonisation of certain aspects of copyright and related rights in the information society. Indeed, the Directive provides for exceptions to the reproduction and communication to the public rights in case of use of works for the purpose of advertising the public exhibition or sale of artistic works, to the extent necessary to promote the event, excluding any other commercial use. This exception has not been implemented in Italy by the Italian Copyright Law (Italian Law n. 633 of 22 April 1941, as subsequently amended).