The Art Investment and Art Auctions - A Fresh Analysis of the Post-Covid-19

Abstract

The present research wanders about the role of the 2020 Covid-19 pandemic in the development of new mechanisms of investment and of auctioning in the art market. To answer the research question, the thesis has been articulated on a multi-level analysis which progressively approaches the central topic, starting with a revision of the existing literature in the field of the Economics of Arts and Culture, and concluding with some fresh comments about the current situation of the cultural exchange. The first chapter confronts the ongoing evolution of the artistic sector, trying to explain the importance of studying it from an economic point of view. In fact, Chapter One goes on with a section describing the composition of the art market; in particular, it highlights the urgency of considering art as an economic good, specifying the economic agents who orbit around this sector, and the institutions that led the art market to its exceptional improvement. The demand-offer dynamics occurring in this context have been delineated to bring to light those features which render the art market one of a kind. Thus, art owns a peculiar multifaceted nature that continues to be addressed at Chapter Two. Inquiring the broad topic of the art investment, it has been discovered that artistic goods are also suitable as financial assets. Such a statement paved the way for managing a discussion about the value of arts, considering them both as aesthetic pieces and as profitable exchange objects. From this reasoning, the second chapter moves on to a wide discourse concerning prices and price indices in the art market, in the attempt to clarify how to monitor its trends over time. The investment in art has also been investigated in its uncertainty and riskiness, coming to shape some of the best solutions for a fruitful financial portfolio. These two chapters have proved to be necessary for the drawing up of the third section of this essay. As a matter of fact, Chapter Three expounds the concept of auctions both as prominent institutions in the historical growth of the art market, and as the favourite venues for individual art investors. Here, the rise of the idea of auction has been told, surveying the common characteristics of the auction trade, as well as the different auctioning mechanisms that have come to the fore in centuries of progression, underlining the anomalies of these processes with respect to other purchase models. The auction system has also been probed from its participants’ standpoint: buyers’ and sellers’ behaviours have been observed by means of auction theory, in order to trace the foremost strategies that they should enact when taking part in auctioning. The most pertinent paragraph of the chapter is the one about art auctions, since it allows to clearly distinguish them from other kinds of processes due to the atypical identity of artistic objects. In the end, some instructions towards a successful auction design have been displayed. In this framework, the final chapter deals with the escalating blossoming of online auctions in the last few decades, and it particularly focuses on the forced improvement the art market had to face in the circumstances caused by Coronavirus. Some of the latest art market reports have been recorded, in the attempt of understanding if and how arts have been capable of standing out when the entire globe was obliged to step back. Before- and after-the-pandemic data comparison has been useful to finally answer the research question, i.e. if what have been said in the previous chapters somehow deserve an in-depth review after the 2020’s impact. Chapter Four of this dissertation lays the foundation for further comments about the topic; it bears the purpose of encouraging a steady interpretation of possible future scenarios for the arts field. The art market has long proven its worthiness in the global surrounding; now, it is time to measure up, and to get ready for the upcoming plot of this journey.