Reservation Prices and Pre-Auction Estimates: A Study in Abstract Art

22 Pages Posted: 6 Mar 2006 Last revised: 15 Jan 2008

See all articles by Calin Valsan

Calin Valsan

Bishop's University - Williams School of Business

Robert Sproule

Bishop's University - Department of Economics

Date Written: July 2007

Abstract

Using a sample of European abstract art we show that reservation prices constrain pre-auction estimates in such a way that we are more likely to observe overestimation relative to the midpoint of the estimation window. At the same time, we also find that the low pre-auction estimate is a more powerful, accurate and precise predictor of hammer prices than the high estimate.

Keywords: Art Auctions, Abstract Art, Pre-auction Estimates, Reservation Price, Bias

JEL Classification: D44, G12, Z11

Suggested Citation

Valsan, Calin and Sproule, Robert, Reservation Prices and Pre-Auction Estimates: A Study in Abstract Art (July 2007). Available at SSRN: https://ssrn.com/abstract=886744 or http://dx.doi.org/10.2139/ssrn.886744

Calin Valsan (Contact Author)

Bishop's University - Williams School of Business ( email )

Lennoxville, Quebec J1M1Z7
Canada
1-819-822-9600 (Phone)
1-819-822-9720 (Fax)

Robert Sproule

Bishop's University - Department of Economics ( email )

Lennoxville, Quebec J1M1Z7
Canada
819-822-9600 Ext. 2480 (Phone)

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