Evidence of Auction House Influence Over Buyer Behaviour and Price Formation in the Australian Art Auction Market

During the last six months, there has been much discussion in the general and arts media about the manifestation of problematic practices within the Australian art auction market. Although the nature of these practices has been scrutinised, scant attention has been paid to how the methods and mechanisms employed by auction houses to build business during the art market boom that commenced in the late 1990s might represent a force that could undermine the sustainability of the market. Fundamental to this is quantifying the extent to which auction houses are able to influence market development. In this paper, I present empirical evidence that suggests that major Australian auction houses can exert significant control over buyer behaviour and price formation

Art at auction: price formation and the creation of superstars in the Australian art auction market

© Dr. Meaghan Wilson-AnastasiosThis thesis shows that prices generated by the art auction system can be anything but mysterious despite the common perception that art, as a commodity, somehow falls outside the norm compared with other economic systems. Far from being the by-product of an enigmatic process, auction prices evolve directly from the mechanisms that shape the market and the human agents and institutions that dominate the system. Using the non-Indigenous Australian art market as a case study, this thesis offers a new, cross-disciplinary model that draws on economic and art-historical methodologies as a means of examining and explaining price formation within the art auction market. The research presented shows that the Australian auction market is dominated by a very small number of artists who are responsible for generating the lion’s share of revenue. Referencing cultural economic theory, I describe these artists as ‘superstars’. I discuss the superstar effect as it is defined in economic terms and show how it manifests in the art auction record. I map the existence of a superstar class of artists at the high-end of the Australian art auction market and consider the implications of this for art’s investment potential. Most market commentaries focus on the top-end of the market. This study uses as its starting-point a dataset of over 2,500 artists active at all levels of the secondary-market compiled from auction records covering the period 1972-2004, including artists who registered just a single auction appearance. This presents a broad overview of the market that offers new insights into the relationship between levels of professional accomplishment and auction price. Artists’ auction records and biographies are examined in detail in addition to agglomerate data for the market as a whole. This examination presents a picture of the key events, agents and institutions that shaped the auction market in Australia during the ‘boom’ period that commenced in the late 1990s. The premise of the ‘superstar’ artist is perpetuated and enshrined by the way these factors interact with the art auction system and place upward pressure on prices. The model of the art auction market presented in this thesis suggests that the prices it generates can be formed by activities that have little if anything to do with genuine competitive forces. As I will show, this can have implications for the efficiency and sustainability of the market

Evidence of Auction House Influence Over Buyer Behaviour and Price Formation in the Australian Art Auction Market

During the last six months, there has been much discussion in the general and arts media about the manifestation of problematic practices within the Australian art auction market. Although the nature of these practices has been scrutinised, scant attention has been paid to how the methods and mechanisms employed by auction houses to build business during the art market boom that commenced in the late 1990s might represent a force that could undermine the sustainability of the market. Fundamental to this is quantifying the extent to which auction houses are able to influence market development. In this paper, I present empirical evidence that suggests that major Australian auction houses can exert significant control over buyer behaviour and price formation

Global COVID-19 lockdown highlights humans as both threats and custodians of the environment

The global lockdown to mitigate COVID-19 pandemic health risks has altered human interactions with nature. Here, we report immediate impacts of changes in human activities on wildlife and environmental threats during the early lockdown months of 2020, based on 877 qualitative reports and 332 quantitative assessments from 89 different studies. Hundreds of reports of unusual species observations from around the world suggest that animals quickly responded to the reductions in human presence. However, negative effects of lockdown on conservation also emerged, as confinement resulted in some park officials being unable to perform conservation, restoration and enforcement tasks, resulting in local increases in illegal activities such as hunting. Overall, there is a complex mixture of positive and negative effects of the pandemic lockdown on nature, all of which have the potential to lead to cascading responses which in turn impact wildlife and nature conservation. While the net effect of the lockdown will need to be assessed over years as data becomes available and persistent effects emerge, immediate responses were detected across the world. Thus initial qualitative and quantitative data arising from this serendipitous global quasi-experimental perturbation highlights the dual role that humans play in threatening and protecting species and ecosystems. Pathways to favorably tilt this delicate balance include reducing impacts and increasing conservation effectiveness