The Art Market as Keynes’ Beauty Contest with a $10,000 Prize
To increase primary market sales, do artists alter the content of their work to follow trends? Our survey of U.S. visual fine artists finds that about half do. We compare these artists across demographic, market experience, and motivational measures, to construct a behavioral profile. We also compare trend following behavior indicated by stated and revealed preferences. In Keynes’ beauty contest game, when quality is subjective, the winner successfully anticipates the average preference of a group of players, who are also each predicting the average preference. Do arts markets reward this type of behavior? We find they do, with a $10,000 average price premium for professional artists who design content for collectability. This premium holds across four marketplace types. This premium suggests trend appropriation as a dominant strategy across demographic groups. However, appropriation as a dominant strategy suggests an externality to artists who reject this behavior—yet still have their work appropriated—and a disincentive to innovation
Year of publication: |
2022
|
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Authors: | Flanigan, Rachel ; Guerrero, Federico L. |
Publisher: |
[S.l.] : SSRN |
Saved in:
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