Market Evolution of Art Dealers

51 Pages Posted: 9 Nov 2016 Last revised: 30 Aug 2017

See all articles by Dakshina G. De Silva

Dakshina G. De Silva

Department of Economics, Lancaster University Management School

Marina Gertsberg

Maastricht University

Rachel A.J. Pownall

Tilburg University - Department of Finance; Maastricht University - Department of Finance

Date Written: August 28, 2017

Abstract

Using a unique historical data set, we show the value of expertise and reputation during the evolution of the art market. First, we illustrate how market dynamics encourage the entry of dealers with heterogeneous characteristics. Second, our results provide evidence that relatively larger dealers pay about 21% more for an artwork of the same quality than smaller dealers as a result of their accumulated experience and reputation. Third, our results indicate that larger dealers are more likely to survive in the market. Our evidence outlines the importance of the accumulation of market power in an emerging market characterized by uncertainty and heterogeneity. These results have important implications for maintaining and sustaining competitive advantage.

Keywords: Auctions, Art Dealers, Market Evolution, Reputation, Experts

JEL Classification: L11, D44, Z11, D47

Suggested Citation

De Silva, Dakshina G. and Gertsberg, Marina and Pownall, Rachel Ann Jane, Market Evolution of Art Dealers (August 28, 2017). Available at SSRN: https://ssrn.com/abstract=2866949 or http://dx.doi.org/10.2139/ssrn.2866949

Dakshina G. De Silva

Department of Economics, Lancaster University Management School ( email )

Lancaster LA1 4YX
United Kingdom

Marina Gertsberg (Contact Author)

Maastricht University ( email )

P.O. Box 616
Maastricht, 6200MD
Netherlands

Rachel Ann Jane Pownall

Tilburg University - Department of Finance ( email )

P.O. Box 90153
Tilburg, 5000 LE
Netherlands

Maastricht University - Department of Finance ( email )

Maastricht, 6200 MD
Netherlands

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