Record Prices at International Art Auctions: Understanding the Power and Limits of Marketing

Since the growth of the art market into a capitalized global art industry, public and academic discourse on art auctions has been dominated by record prices. Despite the financial potential of art auctions as well as the public and academic interest in art, understanding of art auction prices is limited. Price intransparency is exacerbated by contrasting approaches in theory and practice: Theory is dominated by quantitative studies that measure the effects of single price determinants. The literature body is broad but interdisciplinary and fragmented. Practice emphasizes the inadequacy of quantification. Instead, practice is guided by a prevailing industry logic that emphasizes the role of art expertise and non-quantifiable factors like artistic merit and quality. To date, there is no comprehensive theory of art auction prices that combines both perspectives. To fill this gap, the author conducts three studies: A systematic literature review (Study 1) of 100 high-impact journal articles summarizes the (quantitative) knowledge on price determinants. In-depth expert interviews (Study 2) clarify how these determinants and other factors that are unquantifiable or difficult to quantify influence prices. Digital focus groups (Study 3) resolve remaining ambiguities between theory and practice and elucidate the role of marketing for auction prices.