Experience and Brokerage in Asset Markets: Evidence from Art Auctions

42 Pages Posted: 26 Feb 2020

See all articles by Brunella Bruno

Brunella Bruno

Bocconi University - Department of Finance

Emilia Garcia-Appendini

University of Zurich - Department of Banking and Finance

Giacomo Nocera

Audencia Business School

Date Written: February 15, 2016

Abstract

Focusing on the art market, where auction houses act as brokers between art sellers and buyers, we investigate whether more experienced brokers achieve better performance as information providers. We use a unique data set of auctions of Italian paintings in various houses around the world, and we measure experience as the number of times an auctioneer has auctioned the artworks of a certain artist in a given location. We find that more experienced auction houses (i) are more likely to sell and (ii) provide more precise pre-sale estimates. These findings suggest that experience plays an important role for brokers to reduce illiquidity and opacity in markets with asymmetric information.

Keywords: Brokerage, information, experience, art auctions

JEL Classification: G24, D44, D82, Z11.

Suggested Citation

Bruno, Brunella and Garcia-Appendini, Emilia and Nocera, Giacomo, Experience and Brokerage in Asset Markets: Evidence from Art Auctions (February 15, 2016). University of St.Gallen, School of Finance Research Paper No. 2016/05, Available at SSRN: https://ssrn.com/abstract=2732509 or http://dx.doi.org/10.2139/ssrn.2732509

Brunella Bruno

Bocconi University - Department of Finance ( email )

Via Roentgen 1
Milano, MI 20136
Italy

Emilia Garcia-Appendini (Contact Author)

University of Zurich - Department of Banking and Finance ( email )

Schönberggasse 1
Zürich, 8001
Switzerland

Giacomo Nocera

Audencia Business School ( email )

8 route de la Jonelière, BP 31222
Nantes Cedex 3, Cedex 3 44312
France

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