Star Artists and Herding in Fine Arts’ Market: Theory and Empirical Evidence

45 Pages Posted: 26 Feb 2020

See all articles by Ted F. Azarmi

Ted F. Azarmi

University of Tuebingen; Heilbronn University of Applied Science

Philipp R. P. Menny

University of Tuebingen; Schätzle & Cie. GmbH

Date Written: March 12, 2013


This paper uses information cascades theory to analyze the art market. It focus on the art stars, explaining the phenomenon that in the art market a small fraction of artists accounts for most of the trade and dominate the financial activity. We analyze fine art auction data. In particular, we draw a Lorenz-curve for the distribution of auction volume (number of works times auction price) in three art market segments. Our auction data demonstrates that a relatively small fraction of artists account for a large portion of the art auction volume. We provide empirical evidence for our theory of herding behavior in fine arts markets. Our data shows that historical auction performance of an artist is significantly more influential in determining the artist’s success than the quality of her work. In particular, our theory and empirical evidence suggests that contemporary artists and less-established ones are subject to more herding behavior than 400 highest ranked artists.

Keywords: Art Valuation, Superstars, Herding, Informational Cascades, Fine Art Markets, Information Asymmetry, Talent, Quality, Success, Contemporary Artists

JEL Classification: D82, D83, Z11, G32, G34

Suggested Citation

Azarmi, Ted F. and Menny, Philipp R. P. and Menny, Philipp R. P., Star Artists and Herding in Fine Arts’ Market: Theory and Empirical Evidence (March 12, 2013). Available at SSRN: or

Ted F. Azarmi (Contact Author)

University of Tuebingen ( email )

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Heilbronn University of Applied Science ( email )

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Philipp R. P. Menny

University of Tuebingen ( email )

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72074 Tuebingen, Baden Wuerttemberg 72074

Schätzle & Cie. GmbH ( email )

Unterer Schlipfweg 24
Weil am Rhein, 79576

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