Dealer Networks in the World of Art

59 Pages Posted: 26 Feb 2020

See all articles by Dakshina G. De Silva

Dakshina G. De Silva

Department of Economics, Lancaster University Management School

Marina Gertsberg

Monash University

Georgia Kosmopoulou

University of Oklahoma - Department of Economics

Rachel A.J. Pownall

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

Date Written: October 9, 2017

Abstract

We apply network theory to study auction outcomes in the fine art market. Using a unique historical data set, of London-based art auctions that took place between 1741 and 1913, we investigate the drivers of strategic network formation between dealers (buyers) and sellers and the effect of network structure on artwork prices and market exit. The network size and similarities in art specializations between trading partners strongly influence the decision to form links. A larger network and a higher degree of specialization exacerbate informational asymmetries across buyers leading to higher rents through lower prices and facilitate longer market presence.

Keywords: Auctions, Art Dealers, Networks

JEL Classification: D44, D82, L14

Suggested Citation

De Silva, Dakshina G. and Gertsberg, Marina and Kosmopoulou, Georgia and Pownall, Rachel Ann Jane, Dealer Networks in the World of Art (October 9, 2017). Available at SSRN: https://ssrn.com/abstract=3050848 or http://dx.doi.org/10.2139/ssrn.3050848

Dakshina G. De Silva

Department of Economics, Lancaster University Management School ( email )

Lancaster LA1 4YX
United Kingdom

Marina Gertsberg (Contact Author)

Monash University ( email )

Australia

Georgia Kosmopoulou

University of Oklahoma - Department of Economics ( email )

633 Elm Avenue
306 Ellison Hall
Norman, OK 73019
United States
405-325-3083 (Phone)
405-325-5842 (Fax)

HOME PAGE: http://georgiakosmopoulou.oucreate.com/

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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