The visual arts market, in general, and the prices commanded by paintings at the two leading auction houses, in particular, tend to peak at the end of economic expansions. Despite extensive scholar and media interest, there are a number of aspects of the workings of the art market that are still not well understood. This project tries to throw light on some of its most prominent puzzles: what determines the auction price of a painting? Why is that only two-thirds of all lots (paintings) sell at auction? Are masterpieces good investments? Do prices systematically decline during an auction (that is, is there an “afternoon effect”)?
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