Evolution of a dealer trading network and its effects on art auction prices

We use a unique historical data set (1741-1913) of all London-based art auctions to capture the role of information acquisition in the development of a trading network for dealers and its effect on artwork prices. We explore how the network size, depth of interactions, and similarities in art specia...

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Bibliographic Details
Published inEuropean economic review Vol. 144; p. 104083
Main Authors De Silva, Dakshina G., Gertsberg, Marina, Kosmopoulou, Georgia, Pownall, Rachel A.J.
Format Journal Article
LanguageEnglish
Published Elsevier B.V 01.05.2022
Subjects
Art dealers
Auctions
Trading networks
Auctions
Art dealers
Trading networks
D44
L14
D82
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Summary:We use a unique historical data set (1741-1913) of all London-based art auctions to capture the role of information acquisition in the development of a trading network for dealers and its effect on artwork prices. We explore how the network size, depth of interactions, and similarities in art specialization between trading partners influence the decision to form new links. We find that, a larger and deeper trading network exacerbates informational asymmetries among buyers, leading to a price advantage. We show that information transmission through a network of experienced dealers is important in determining the price they pay - a factor that has been overlooked so far in the literature.
ISSN:0014-2921
1873-572X
DOI:10.1016/j.euroecorev.2022.104083