Ordering, Revenue and Anchoring in Art Auctions

66 Pages Posted: 25 Aug 2014

See all articles by Harrison G. Hong

Harrison G. Hong

Columbia University, Graduate School of Arts and Sciences, Department of Economics; National Bureau of Economic Research (NBER)

Ilan Kremer

University of Warwick

Jeffrey D. Kubik

Syracuse University - Department of Economics

Jianping Mei

New York University (NYU) - Department of Finance

Michael Moses

ART MARKET CONSULTANCY

Date Written: August 22, 2014

Abstract

We estimate the effect of ordering by value on revenues in sequential art auctions held by Sotheby’s and Christie’s. We exploit a pre-determined rotation of which of these two houses holds their auction first during auction week in New York City. When the house that goes first has relatively expensive paintings compared to the other house, we find that the sale premium for the week is around 21% higher relative to the mean sale premium, and the fraction of paintings sold during the week is around 11% higher. We provide evidence that this is due to an anchoring effect.

Keywords: Auctions, Anchoring, Ordering, Revenues, Sequential

JEL Classification: D, D00, D44

Suggested Citation

Hong, Harrison G. and Kremer, Ilan and Kubik, Jeffrey D. and Mei, Jianping and Moses, Michael, Ordering, Revenue and Anchoring in Art Auctions (August 22, 2014). Available at SSRN: https://ssrn.com/abstract=2485205 or http://dx.doi.org/10.2139/ssrn.2485205

Harrison G. Hong (Contact Author)

Columbia University, Graduate School of Arts and Sciences, Department of Economics ( email )

420 W. 118th Street
New York, NY 10027
United States

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Ilan Kremer

University of Warwick ( email )

Gibbet Hill Rd.
Coventry, West Midlands CV4 8UW
United Kingdom

Jeffrey D. Kubik

Syracuse University - Department of Economics ( email )

426 Eggers Hall
Syracuse, NY 13244-1020
United States
315-443-9063 (Phone)
315-443-1081 (Fax)

Jianping Mei

New York University (NYU) - Department of Finance ( email )

Stern School of Business
44 West 4th Street
New York, NY 10012-1126
United States
212-998-0354 (Phone)
212-995-4221 (Fax)

Michael Moses

ART MARKET CONSULTANCY ( email )

20 WEST 64TH STREET
APT 26K
NEW YORK, NY 10023
United States

HOME PAGE: http://www.stern.nyu.edu/om/faculty/moses/

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