Art Auctions

22 Pages Posted: 16 Apr 2019 Last revised: 23 Apr 2019

See all articles by Kathryn Graddy

Kathryn Graddy

Brandeis University - Department of Economics

Orley Ashenfelter

Princeton University - Industrial Relations Section; National Bureau of Economic Research (NBER); IZA Institute of Labor Economics

Date Written: April 2019


Works of art and culture are sold by many means. These include transactions between dealers and their customers, auctions with open outcry, internet auctions, and even, occasionally, sealed bid auctions. However, the standard procedure for establishing art valuations for the most expensive works is still most commonly the English auction, where prices ascend in open bidding. This paper describes how art auctions really work, along with the state of competition between auction houses. For expensive art, competition is dominated by the duopoly of Christie's and Sotheby's. The paper proceeds to describe various interesting features of art auctions, including the declining price anomaly, whether or not auctioneers provide accurate information, and anchoring effects in art auctions. The public auction system provides a valuable method for setting and determining values; it is probable that the inability of auctioneers to capture a significant part of the benefits of the information they produce leads to less use of the auction system than is optimal for society.

Keywords: Art auctions

JEL Classification: D44, Z11

Suggested Citation

Graddy, Kathryn and Ashenfelter, Orley C., Art Auctions (April 2019). CEPR Discussion Paper No. DP13665. Available at SSRN:

Kathryn Graddy

Brandeis University - Department of Economics ( email )

415 South Street MS 021
Waltham, MA 02453-2728
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Orley C. Ashenfelter (Contact Author)

Princeton University - Industrial Relations Section ( email )

Princeton, NJ 08544-2098
United States
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609-258-2907 (Fax)

National Bureau of Economic Research (NBER)

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United States

IZA Institute of Labor Economics

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