Price and Death
38 Pages Posted: 6 Feb 2008
Date Written: February 2008
Abstract
How does an artist's death impact on the price of his or her works of art? We investigate this question in an infinite-horizon dynamic general equilibrium setting. Employing the open-loop Stackelberg equilibrium concept to describe the interactive behaviour of collectors and artists, we find that the art price remains at some well-defined "pseudo-competitive" level as long as the artist is alive. Only when the artist unexpectedly dies, the price increases on impact. This so-called death effect varies negatively with the artist's age at death. If it is well known that an artist is ailing from some terminal illness and his or her death thus does not come as a surprise, the price of the ailing artist's work increases when the news of the ailment is divulged; the price immediately jumps to the level which will prevail at the time when the artist dies.
Keywords: art prices, durable-goods monopoly, Stackelberg equilibrium
JEL Classification: D90, E31, E52
Suggested Citation: Suggested Citation
Do you have negative results from your research you’d like to share?
Recommended Papers
-
Art as an Investment and the Underperformance of Masterpieces
By Jianping Mei and Michael Moses
-
Art as an Investment and the Underperformance of Masterpieces
By Jiangping Mei and Michael Moses
-
How Did Japanese Investments Influence International Art Prices?
By Takato Hiraki, Akitoshi Ito, ...
-
The Careers of Modern Artists: Evidence from Auctions of Contemporary Paintings
-
Testing for Reference Dependence: An Application to the Art Market
By Alan Beggs and Kathryn Graddy
-
The Collateral Value of Fine Art
By Rex Thompson and Clare Mcandrew