Aligning Tactics with Market Capabilities in the Art World: Strategically Capitalizing on Repeat Print Sale Economies

35 Pages Posted: 2 Mar 2013

See all articles by Elliot Bendoly

Elliot Bendoly

The Ohio State University

Roman Kräussl

Luxembourg School of Finance; Hoover Institution, Stanford University

Date Written: February 22, 2013


We apply both auction-dynamics and assortment planning/revenue management lenses to study the effectiveness of repeatedly offering prints of a series for sale at various international auction houses. Theory suggests the potential for differences in the ability of auction houses to buffer sale prices against the repeat appearance of prints, hence positioning certain houses to leverage such repetition. To investigate this potential empirically we employ a fairly novel two-step analysis procedure. We start with the use of a hedonic variant of hierarchical linear modeling (HLM) to estimate the ostensibly unique capabilities of auction houses to obtain relatively high sales prices for repeated-offering print sales of specific genres of art. To account for tradeoffs associated with leveraging multiple repeated-sale capabilities for various genres, we then apply data envelopment analysis to the residuals for the internally repeated sales derived from the hedonic HLM estimation procedures. We find auction houses to generally align their offerings of recently sold print series with their own repeat sale capabilities (RSCs). We also find houses that often repeat the sale of prints internally, and possess strong repeat sale capabilities, further enjoy the prospects of operational efficiency.

Keywords: auction houses, repeat sales, price inelasticity, capabilities, efficiency

Suggested Citation

Bendoly, Elliot and Kraeussl, Roman, Aligning Tactics with Market Capabilities in the Art World: Strategically Capitalizing on Repeat Print Sale Economies (February 22, 2013). Available at SSRN: or

Elliot Bendoly

The Ohio State University ( email )

Fisher College of Business
2100 Neil Ave
Columbus, OH 43212
United States


Roman Kraeussl (Contact Author)

Luxembourg School of Finance ( email )

4, rue Albert Borschette
Luxembourg, 1246
+3524666445442 (Phone)


Hoover Institution, Stanford University ( email )

Stanford, CA 94305
United States

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