WEEK 1 NOTES: GENERAL CHARACTERISTICS OF THE

ART MARKET

Tutorial I - General characteristics of the Art Market

What is the art Market? Is it like any other market?
The Art Market today: Galleries, Art fairs and Auctions.
Art Markets ( Olav Velthuis) →
- Not one single “art market”
- Particular features of art
- Different market segments based on the level of the object, its medium and style
- Different motivations from buyers

The Traded God: Art

What are the main characteristics of the product being traded?
• Determined by Artist, Size, Technique, Medium, Provenance, Date of creation, etc.
• Art as heterogeneous good (non reproducible)
• Art as credence good
• Art as a private luxury good.
• Disclaimer: we will focus on visual arts

The Dynamics of the Market

In art markets … :
• Supply is often fixed, hence apply curve more inelastic
• Flew to no close substitutes, but high elasticity of D (art as a luxury good)
• Lack of information on quality : price as a quality indicator?
• Iliquid market
• Not transparent
• Information asymmetries
• Based on “production on beliefs” (Bourdieu)
• Transaction (search and information, bargaining, enforcement costs) and other costs
(e.g maintenance)

Art Market players

SUPPLY
Artists and intermediaries, i.e commercial institutions (galleries, auction houses), private
sellers, public institutions

DEMAND
Private collectors, public institutions, Governments and Corporations.

GATEKEEPERS
Not directly part of the transaction but can influence both sides of the market. ( Museums, art
press, art consultants, art critics, art investment funds, academies, art foundations,
governments)
A zoom into supply
Simply is often fixed, hence supply curve more inelastic
How inelastic though?
• New supply: new old art and new art –> Example : Lawrence Alma Tadema (Portrait
of Leopold Lö
• Lowered supply : (rellenar)

• Supply from both ways –> reattributions (The man with the Golden Helmet,
Rembrandt)

A zoom into demand

Few to no close substitutes, but high elasticity of D (Art as luxury good)
Why do you buyers engage in this market then?
3 motivational categories: (terminar)

A segmented market
• Primary VS. Secondary market
- Primary = first sale → galleries, dealers, artists
- Secondary = resales → Auction houses, art dealers
• Organized VS. unorganized market
• Market segments: level of the object
• High- end versus Low- end
• Local versus global

The price of Art

• Credence good
• Socially constructed
• Changes over time
• Problems with quality and price determination

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WEEK 2 NOTES: THE PRIMARY ART MARKET AND EARLY
MODERN ART FAIRS

LECTURE
1. Patronage
* Primary market
* New and commissioned art
* Artist > collector
* No intermediaries
* Artist´s studio
* Example : Bruges in the 15th century

2. The historical origins of art fairs

* On spec production of art
* Early modern art fairs
* Professional dealers
* More layered, segmented market
* More international trade
* Example: Antwerp during the 16th century

3. Art fairs today

* Proliferation on a global scale
• Unmissable society event for art world stakeholders
• Generates cultural tourism and reputation boost for hosting cities
• F2F meeting of supply and demand
• Reduces search and transaction costs for buyers
• Heightened exposure for artists and galleries
• Acceptance signals credibiliy for galleries
• Allows for experimentation, exchanges of information which is not yet codifiedand its value
uncertain
• Marketing tool: 40% of annual revenues for galleries (pre-covid)
• Response to hegemony of auction houses
• Engine and barometer of globalization

TUTORIAL
1. Art Market in Antwerp
Context:
• Quick growth in population, commerce and trade
• From small city to power house
• Strong commercial ties with : the English, The Portuguese and The german.
• Port of Antwerp
Supply and Demand
• Abundance of merchants and financiers
• Supplyy of raw materials
• Up-to-date with latest trends

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 • “Mother of all artists”
• Artists´studios as protoindustrial workshops
• Active local government
Why Antwerp?
1. Abundance of merchants and financiers
2. Supply of raw materials
3. Up-to-Date with latest trends
4. “Mother of all artists”
5. Artist´s studios as proto-industrial workshops
6. Active local Government

Why Art trade?

1. Influx of human capital → S Y D
2. Standardised Production → artwork as a commodity
3. Disposable income→ A demand- Driven market
Karel vanMander, 1604 :”The Grand, celebrated city of Antwerp, which prospers through
commerce, has summoned from everywhere the most excellent in our art, who also
frequently went there because art loves the company of wealth.”

• 16th Century Florence → Florence and Botticelli

(The reading by Blume)
- Art Market in Florence – A city of magnificence
*Art consumption as demonstration of social position
*Wealth and Faith
*Honestas and utilitas
*Honour as intangible aspect of art pricing
* Higher skills of a master → honour to the patron and artist → higher price
*Identity of collector influencial on: a.) price of artworks? b.) Quality of
artworks?

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 • How do Florence and Antwerp compare?
- Scarce relevance of Florence with the emergence of the new market in Antwerp
- Florence was “the most provincial of the great European capitals of international
business”
- The economy of Florence looks like a work of art itself
- Familismo
1. Local vs international market
2. Artist- to- consumer vs artist-to…?
3. Customised vd “impersonal” art
4. Importer vs Exporter
5. Circulation of artists vs Circulation of artworks
6. Humanistic culture vs Commercial culture

DISCUSSION – how do Florence and Antwerp compare?

• ON DEMAND→
- Florence art market was more based on commission vs Antwerp where art fairs
with ready mades mad the art trade more impersonal and on spec
- Demand and supply were met more in Antwerp because of the international and
cultural city Antwerp was compared to Florence
- The content of artworks were similar that it were mostly religious themes,
however in Florence the motivations were more because of honour and in
Antwerp because they were easily recognizable for different /international
merchant
• ON SUPPLY→
- Antwerp → > international, multiple styles. More choice and lower prices due to
high efficiency.
- Florence→ > local, more one sort of style. More elitist and more “master”
paintings. It is more competitive than Antwerp , due to commissioned art being
the most important to painters
- High plurality in genres for Antwerp results in less competition amongst artists.
Also because an artwork was not typically made for one buyer in specific, so less
dependent on commissions, more progressive.
- Both markets are catered to financially stable groups
• ON BUYERS MOTIVATIONS →
- Florence → Increasing social status, commissioning from masters for the honor,
religious motivation.
- Antwerp → Showing off financial status (disposable income), secular (use to
decorate homes), art as a commodity
- Now → Commercially driven, showing off financial status, owning the
innovative/trendy artwork (knowing what is popular), showing off intellect.
• ON PRICE →
- 15th century →
*The identity of the buyer matters now than the identity of the buyer
*The price depends on materials, identity of the buyer
*Where the artwork will be placed, who makes the work
- Nowadays →
*The name of the artist matters more
*Gatekeepers/intermediaries determine what is legitimate art
*Variety of materials that are seen as

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 • ON THE MARKET (To what extent can the art market in the norther European
region be considered more “commercial” to the Florence art market?)
• Readymades and reproductions in Antwerp vs. commissions in Florence
• Impersonal market in Antwerp vs. personal market in Florence
• Entrepreneurial spirit Antwerp artists vs. Art for honour-spirit Florence Artists
• Church governed Panden and fairs in Antwerp vs. local elite led market
• Panden: specifically for market function vs. Florence artist workshops > Difference
in place of primary market, both demand focused but on different scales
• Growth of Antwerp, Florence had its peak earlier; leads to faster development
economies
• Internationally oriented in Antwerp vs. Local oriented market in Florence
• Monetry incentives/rewards for artists in Antwerp vs. Symbolic incentives/rewards
for artists in Florence

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WEEK 3 NOTES: THE DUTCH GOLDEN AGE- A mass
market for paintings

Readings : Bok (2001), Sluijter (2009), Nijboer (2019)

The demand for art, then, depends on changing needs for certain kinds of things; and
although these needs operate as variables that do not necessarily prompt a demand for art,
material culture conditions an essential component of this demand.
- Richard A. Goldthwaite, 1993.

- Where are we? Amsterdam and Antwerp

Bok and Sluijter- Central Questions

1. What factors in terms of demand contributed to the emergence of Amsterdam as an

important art center after 1580?
2. What factors in terms of supply contributed to the emergence of Amsterdam as an
important art center after 1580?
3. What was the influence of immigrants from the South on the art market in the North?
4. What are the characteristics of the art market in Amsterdam?

- What factors contributed to the emergence of Amsterdam as an important art

center after 1580?

BOK
• Shift in wealth/capital → Mass
market demand
• Influx of skilled artists and wealthy
merchants → culture of collecting
• Changing taste of consumer →
Dutch style and Flemish traditions
• Increase in per capita income,
purchasing power
SLUIJTER
• General shift production → Mass
market supply
• Influx of Southern immigrant
painters → artistic rivalry + Soythern
influence on buying habits → culture
of art
• Product and process innovation
based on competition among artists
• Omnipresence paintings

• Increased productivity of artists

- What was the influence of Southern Netherlands immigrants on the art market in
the North?
• Culture of collecting
• Culture for art → Apprentices and workshops

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 • Auctions
• Protectionist policies against immigrant dealers
• New styles and subject matters (process and product innovation)
- What are the characteristics of the art market in Amsterdam?
• High purchasing power → high demand (who are the buyers?)
• Increasing number of artists → high supply
• Competitive market
- Specialization of styles
- Differentation in dealers (high and low- class dealers)
- Changing guild regulations
Development towards a demand-driven market → how is this different from in Florence
/Bruges/ Antwerp?
- Main findings
• Product innovation: introduces a totally new commodity or changes the outward
characteristics of an old one
• Process innovation : reduces the cost of producing a particular product
• How does this influence the art market? :
*Professional competition
*High level of specialization and innovation
*Art as consumer product
- Changes in style
- Decline of the art market in Amsterdam
1. Failing demand from economic stress→ Anglo-Dutch wars in the 1650s-1670s. Stock
market crash 1672
2. Over-saturation of the market→Art is durable good, Cheaper “second-hand” paintings

1672→ final collapse of the mass market for art in the Northern NL.

NIJBOER READING → The painting industries of Antwerp and Amsterdam

• Rubens vs Rembrandt
• Antwerp vs Amsterdam
• “Flanders” vs The Netherlands

1. An empirical comparison: Use of ECARTICO

Different approach
• Aggregation and grouping of biographical data on artists
• Over 59.895 individuals, of which 9.531 painters
• Based on AMS baptism, marriage and burial registers
• Overall, statistics on the Antwerp and Amsterdam painter population between c.1475 and
c.1725 (Focus 16th and 17th centuries)

2. Main findings
1. After 1585 –Antwerp painting industry recovered quickly → Antwerp = leading center of
painting in Low Countries (until late 1640s)
2. Between 1600-1640 –Amsterdam painting industry // to Antwerp. Amsterdam dependent

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on Antwerp as main center of production and distribution?
3. Migration of painters Antwerp to Amsterdam did NOT involve a large relocation of
established production capacity
4. Antwerp painter population = cohesive social group Amsterdam painter population =
relative weak cohesion

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WEEK 4 NOTES: DEALERS THROUGH THE AGES- The
development of art dealing and the commercialization
of the art trade

LECTURE
• In a perfect market:
- Goods: homogeneous
- Actors: rational
- Information: easily and equally available
- Value: individually and objectively determinable
• But in the art market:
- Goods: NOT homogeneous
- Actors: NOT rational
- Information: NOT easily and equalyy available
- Value: NOT individually and objectively determinable
- How to deal with UNCERTAINTY in terms of quality and demand?

• Forchondt (Antwerp)
• Guillaume Forchondt (active 1643-1678) and relatives / associates
• Vertically integrated firm: integration of production and distribution process
• Serial production based on prototypes (principaelen)
• Offices (associates) in Antwerp, Vienna, Cadiz, Seville, ...
• 75% of trade in paintings was international
• Diversification in traded luxury goods

Business strategies
1. (semi-)Vertically integration: production, distribution, sales: family & fellow artists
2. Diversification: Unique and ‘mass produced’ goods, local & global, new and second-hand,
paintings, mirrors, furniture, to olive oil, chocolate and capers
3. Merchant-craftsman-connoisseur

Mediating trade = mediating taste

• Circuits of Commerce:
- Primary and Secondary
- Cultural and economic
- Local and global

• Art dealers:
- Co-producer
- Selector
- Tastemaker

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WEEK 4- TUTORIAL NOTES (29th November 2022)
• 15th century: Panden / artists renting stalls
• 16th century: Expansion to a more complex, fragmented and international market >
specialized panden, market all year long
→ need for figures for organizational tasks: Art Dealers
1. Artists focus on art making
2. Diversification of sales channels
- Hieronymus de Cock- Print Dealer
- Geographical closeness
- A family business

Emergence of Dealers 16th and 17th century

16th century Antwerp (week2)

• 1583: Fire destroyed the Beurs and the Pand in Antwerp, Siege of Antwerp
• 1585: Spanish Siege
- Artists and Dealers move to the Northern Netherlands and Paris
- Paintings produced in Antwerp /Mechelen overly supplied > sales abroad
17th century Amsterdam (week 3)
• Golden Age : high production and quality
• Emergence of a mass market

Questions Case studies – Montias (1988) and Van Ginhoven (2015)

1. What factors led to the rise of dealers?

- 1630´s /40s expanding market

- Attention to authenticity and originality
- Increasingly diversified markets
- Rise in income which lead to rise in demand, rise in popularity in paintings and
artists
- Because of the high demand, the artist had to focus on meeting the supply and
therefore hand over the dealer´s role to a mediator in the art market
- Many merchants stop coming to Antwerp for trades, but there is and over supply of
artworks, dealers decide to trade internationally to meet the demand.
2. Who were art dealers? What was their relantionship with artists?
* Artists, Frame makers, inn and tavern keeprs, wine merchants, etc…
* Families of dealers
* High vs low end dealers: Purchasing individual pieces vs controlling production
* Initially non-specialised

Class answers:
- Intense competition
- Artists functioned as dealers as well
- Dealers would help artists sell (when they were not part of the guild)
* Artists couldn’t sell if they were not a guild member, but they could through a dealer
* Dealers would also inform artists on what was en vogue
- Some dealers developed into intermediaries → gatekeepers
- Dealers were educated , from financially stable families (Artist families as well) + they had
to be residents to the city

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*Second- hand dealers usually women
*Generally merchants
* Few professional dealers in the NL
*Also kept a stock of paintings /copies which they woulf show in galleries
- Overall dealers were people that were already involved in the art world
- Dealers stimulate artists to work -> employers?
* Create a supply of art works
* Representing big artists

3. What were the functions of dealers? What was their role in the market?
* Intermediary figures
*Mediating demand and/ or increasing supply
* Save time, Search and information costs
*Allow non-registered artists ( in the Guild) to work
Class answers:
- Network of artists, collectors, and trade-contacts (international)
- Mediator
-Tastemaker, influence both demand and supply
- Gatekeeping/selecting role; communicating what was in fashion
- Promotion function
- Providing to artists
- Diversification of the luxury goods market
- Signal of quality (for the collector /demand)

4.1 How did Guilliaume Forchondt operate?

- He was an Antwerp-based dealer operating internationally between 1643 and 1678
- Forchondt´s business was family based- he worked with his sons
- (Vertically integrated system and Segmented market) → Vertical integration – he oversaw
the production and distribution of art on a large scale
- Vertical integration – increased control of the suppliers and market power, reduced the
transaction costs → lower risks associated with the supplying channel
- He had connections around the world with local agents, which made the operation easier

4.2 What does this kind of operation require?

- Information network
- Financial resources
- Web of clients

Contemporary Art Dealers

Introduction
• Dealers = intermediaries > between the supply and demand for artworks
• Operate in the Primary and secondary market segments
• High end and Low end
• Small enterprises (few people employed) to multiple exhibition spaces globally (over
50 employees)
• Dealers vs Gallerists
• Being a dealer is considered a risky activity : unpredictable market fluctuations → rely
on backers rather than banks
• Little information about revenues and profit rates: High secrecy and information
asymmetries

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 • Low education-related barriers to entry: No licenses, no diplomas, low start-up costs
• A diversified market: Monopolistic competition
Some examples:
- Otto Naumann
- Jhonnt van Haeften
- Larry Gagosian
Primary Market → Art sold for the first time
• Represents a limited number of artists
• Long-term relationships (joint-venture type)
- To establish an artist in the cultural scene and the market
- No contracts (high costs to establish monitor and litigate)→ (“hand shake”
contracts, they relay on trust between one another.
- Based on moral obligation, trust and reputation
The Primary Market Business Model
a) Works on consignment
- Profits at sale divided (standard 50/50% but flexible)
-Lower (and shared) risks and capital investment

b) Direct acquisitions with transfer of property rights

- Build up stock for long-term
- Higher risk
• Profits from successful artists subsidize efforts towards the less successful

The Secondary Market Business Model – Resale Market

a.) Works on consignment by art owners
* Commision on sale: 5 to 25%

b) Workd purchased to resell

* Arbitrage

Function of the modern dealer

• Tastemakers → Discriminating taste + strong networks + interested clients
• Intermediaries, Gatekeepers and cultural mediators
- More than supply-demand mediators: gatekeepers and cultural mediators
- Selection and promotion of “their” artists
- Connects artists and buyers through long-term relationships of trust
• Actively engaged in promoting artistic and economic value of works to clients
• Work at the intersection of Artistic and Economic value

17th century dealers vs Contemporary dealers

• Dealer pays up front for art • Split profits with dealer

• Respond directly to demand
• No exclusive representation
• Facilitate economic exchange
between producers and consumers
• Fewer additional intermediaries
• Artist-dealers, multiple roles
• Dealers not respectable occupation
• Dealer can make a name for artist
• Exclusive representation of artist
• Develop relationships between
dealers and artists/ dealers and
buyers
• Non-commercial passion for art
• Expert knowledge
• Cultural gatekeepers

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WEEK 5 NOTES: RISE OF ART AUCTIONS

Everything Art Auctions – from the past to the future?

What is an art auction? An art auction is the sale of art led by an auctioneer, most
commonly held in auction houses such as Christie's and Sotheby's, which have
different locations around the world.

An art auction or fine art auction is the sale of art works, in most cases in an
auction house.

Art Auctions:
- Secondary market
- Art from existing collections
- New intermediaries and expertise: auctioneer
- New media: printed auction catalogue and advertisements
- Example: London and Paris, 18th century and onwards

INTRODUCTION

From Rambach (2010)

Secondarymarket outlet primarily!
Mediatized and “transparent”

LET´S TALK AUCTIONS TYPES

• Open Outcry
• Hourglass / candle auction
• Sealed-bid auction
• English auction (ascending)
• Dutch auction (descending)
• Second bid auction
• Vickrey auction

TERMINOLOGY
Let´s talk prices:
• Hammer price
• Estimasted prices (low and high) → not too far away from the reserve price
• Reserve price→ the public price, usually shared by the art auctions
• Buy-ins
Unsold items? “Buy-ins”
1. Seller pays fee (% of reserve price set)
2. Unsold items gain bad reputation- “burned paintings”

Lets talk bids!

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 • Bidding off the wall or from the chandelier
• Absentee bid
Compensation models:
Auction house compensation for sale:
• Buyer´s premium : % of hammer price (10-25%; sliding scale) = increasing source of
revenue
• Seller´s commission : % of hammer price paid to the auction house (- 5% for
paintings)
• EXAMPLE =Hammer price = 100€ → Buyer pays 125€ ; seller services 95 €

BID INCREMENT
• Guarantees
- Incentivize buying and selling
- Types: Minimum price guarantee, third party guarantee
• Private sales
• Bid increment
• Guranatees
- Incentivize buying and selling
- Types:
. Minimum price guarantee
. Third party guarantee
• Private sales

THE PAST
First institution - Sotheby´s 1744
• Samuel Baker
• Auctions reached a size of 10.000 books→ absolutely massive
Second institution was based in 1766
• Formed by James Christie
• The Christie´s family
• 1767 the first art auction
• They represented some sort of clubs for people that was interested in art
• Christies became not only a place to create art and sell, it became sort of an exclusive
club for people to go there and see art, and be chill there.

Lets talk auctions

1. First Christie´s Action
2. Gersaint´s Catalogues and French Auctions
3. The Salvator Mundi´s Christie´s Auction
4. Contemporary catalogues
5.Primary Market Auctions:
- First impressionist Auction
- Damien Hirst´s Auction at Sotheby´s

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WEEK 6 NOTES: THE LONG 19th CENTURY

• The 19th century art market in perspective

1. Auction houses
2. Dealers
3. Critics and art expertise
4. Continuity and change
5. The 19th century revisited

Paintings are universally acknowledged to be objects worthy of possession

• Booming art markets in Paris and London:
- Unprecedent economic growth
- Population explosion
- Disposable income (shift toward rents and profits)
- Agglomeration advantages and clustering
- Rough and ready customers: new art buyers
- A steady supply of Dutch, Flemish and Italian pictures (old masters) in the 18th
century
- Growing appetite for living painters after 1800
1. Auction houses and the secondary market
- Exchange platforms
- Engines of consumption: a collector´s market?
- Value creating mechanism: hammer prices as measures of success?
- Dominance of Christie´s in London
Beating Damien to the punch: auctions of new art
- Legitimate venue for primary market sales in Paris in mid 19th century
2. Art dealers
- Birth of the dealer – critic system
- Novel marketing strategies by means monopolization of artists and their stock
- Supply-induced demand
- Arbiters of taste
- Internationalization of the art business
Predecessors: Forchondt (Antwerp)
Guillaume Forchondt (active 1643-1678) and relatives / associates
• Vertically integrated firm: integration of production and distribution process
• Serial production based on prototypes (principaelen)
• Offices (associates) in Antwerp, Vienna, Cadiz, Seville, ...
• 75% of trade in paintings was international
• Diversification in traded luxury goods

Predecessors: Gersaint (Paris)

• François Edmé Gersaint (1694-1750)
• Marketing Dutch and Flemish pictures in Paris, acquisition and monopolisation of

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existing stock
• Value creation through viewing days, extensive catalogues and auctions
• Successfully impacted taste formation and collecting practices using exemplars,
references to similar artists and works of art
• Branding of art dealership

Changing role of dealers

• Decreasing presence of dealers as sellers at auctions and increasing presence as
buyers
• Auction houses take over the older role of dealers as sellers of collections
• Coincides with establishment of “fixed location retail gallery operators”
• Clearer division between primary and secondary market
3. Critics and art expertise
- Establishment of the dealer-critic system
- Need for commercial expertise
- Enlistment of critics and the power of the press
- The Academy´s hegemony challenged

4. Something old, Something new…

* Continuity: specialized art auctions, mediation of dealers, printed catalogues,
internationalization of the art trade, critics and popular media (newspapers)
• Change: scale, new means of communication, widespread use of reproductive prints and
photography, specialized art galleries, exhibition practices (solo shows), museums and
curators, art history programs, demonstration effects of leading collectors .

5. The 19th century revisited

A speculative market?
• Overturn of the academy system and consolidation of the dealer-critic system
• Dealers as arbiters of taste
• Birth of an integrated European art market?
• Recent research: visualizations and big data approach, social network analysis, art markets
other than London and Paris

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WEEK 7 NOTES: THE ART MARKET IN THE 20th CENTURY

LECTURE
What impact had the WWII in the art market and what impact had in New York after
the WWII.

- Art world and WWII

- New York, 1945 (new market for art)

PART I → The art market during WWII

Not necessarily a time where art does really well, people where worried about having a place
to sleep, being safe, have something to eat…
The art market such as in places like France and the Netherlands actually ---- in 1940´s.
The leaders of the nazi in Germany were art lovers , and when they occupied parts of Europe,
they actually started to load art, going to museums and extract art from there. They were very
active collectors of art.
The germans were also employed a number of art experts who helped them to find the top
arts in occupied countries, such as Belgium, Netherlands and France. → ex: Max J.
Friedländer. They also helped them to find the artworks in the occupied territories.
The nazi leaders had an apetite for art, they sent people to another countries to find good art
pieces for them.
• A booming art market in occupied Europe:
- In Paris, The hague and Amsterdam.
- A research has shown that there was a lot of activity during 1940´s, particularly in the
auction system.
- The prices and the volume of the works of art really really reached very high
numbers, this is something that we don’t associate with war, specially because prices
were up, and this is the background of the rising volume.
• The boom explained
- This amazing movement on the art market, why?
- Great depression : particularly looking at France, we are moving out from the great
depression, the economy was really down and this had an effect on the art market, in
the sense that it was very cheap, a lot of paintings and sculptures could be bought for
very little, the dealers had a very large stocks at the beginning of the work. So a lot of
people were in poverty or that art was not an important thing at that time, they got rid
of these works, and as a result the prices were low.
- Looting of art: The occupation forces started looting works of art, they went into
churches, into jewish homes, into museums and picked up these works to have it for
themselves or to sell them.
- Other german buyers: particularly german buyers would come to holland and France
to buy paintings. They had more buying power, so they could buy works of art.
- Local buyers: People were worried about inflation, where is our money going today?
What can I buy with these money and what also can I buy with this money in a year
from now? They wanted things to buy and keep the value. Art became something that
would hold its value.
- Black marketeers: a lot of money generated through the black marketeers, there was a
black market trade to buy and sell coffe, food, oil… There was a lot of black money,
money that was not registered. It was a save investement from that perspective, that
money needed to go somewhere, the man went up quite grastically .

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 - More fakes: Because of the black market , there was created more opportunity for
people to make money with less than original works, so there were more fake
artworks entering in the market, with the black money. Art collectors were at risk ,
this is a side effect perhaps because of the booming of the WWII.
- End of the Boom: As the war came to an end, this also marked the end of the boom,
the Germans went back to Germany (so they are not buying anymore artworks), the
black market money was also drawing up by the end of the war (less black money
that you need to spend differently or use to buy art), all these factors combined
marked the end of the boom of the WWII.
• Restitution (1945-present)
- In 1940´s German Nazis stole a lot of artworks from people’s houses (Jewish),
museums, etc. So since 1945 till nowadays there´s been this long process which is
called restitution, so if you are a descendant of a Jewish family that is not there that
got artworks stolen from them, and all of a sudden this artworks are in a museum,
how do you get them back? Many countries have commissions in place that look at
this claim for restitution, so these artworks could be given to the right owners.
Sometimes is very controversial, because a lot of art apart from being stolen, it was
sold through the auction house. Is this a legal sale? Now there are some people that
check if this is valid or not. In 2021, art has been sent to the descendants of families
that lived during the WWII.

PART II→ The rise of the New York art market after 1945

Post WWII, we´ll see a different art market, the united stated had a very exponential growth
of this art market in those years. The focal point, the concentration has been the city of New
York.
• Beginnings: New York was a fast-growing city; it didn’t come out from nowhere and
it was already in the 19th century with some opening up of the galleries. Being
shipped from the UE to the United States, where you see a new class of buyers
emerging, very wealthy people who showed a particular interest in European art. A
dealer operating from the UK would be instrumental, the role of the dealer there was
extremely important.
• Bringing European art to America: The most well-known dealer was a guy named
Duveen, he specialized in locating and finding works of art on the European continent
and selling them to the wealthy industrialist of the united states.
• Artists refugees heading to NY: What makes New York interesting and special is
thrived because of immigration, a lot of artists and dealers were in occupied countries.
Specially Jewish artist, dealers and collectors would go to the united states but would
end up in new York and brought with them, expressionism, abstract painting, machine
kind of painting and introduced or developed new styles when they were in New
York. (Similar of what happened in Amsterdam). These refugees played an important
factor. EX→ Feran léger, Piet Mondrian, Salvador Dali.
• The power of museums→ The modern art museums, and in New York it started in
1929-1930´s. Museums help legitimize work of art, put them on their walls and
saying “this is worth collecting”, they become important buyers and also select what
is worth exhibiting. Museums in would play a very important role in the art market as
buyers of demand.

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 • A powerful mix of dealers and critics→ wealthy people in ny , they need to
distinguish themselves, they want art collections. The museum are also in position,
they buy artworks and say who are the artists worth collecting. The link here are the
dealers and the critics. The dealer concept was important since 17th century, they tell
people what to collect, they arrange for everything for a price. What is an additional
factor for the art market are the critics, they are not new, we´ve seen them in the 19th
century, and the impact that these critics will have (they can bring the artists in the
Artline, saying “this is what you need to buy”) , so that powerful mix between the
dealers, the critics and the museums totally filled the art market. Not until the 1970´s
the auction house will jump into the art market of the United States (Sotheby’s ,
christie´s, Phillip’s). New York is one of the most important art markets in the world,
next to Hong Kong and London.

TUTORIAL

WEEK 7 ART MARKET NOTES- THE BOOMING ART MARKET

The booming art market in occupied western Europe

Dutch vs French market: some info

Netherlands France
At least 12 active auction houses across
the country
Significant differences in quality of
experts/auctioneers and artworks sold
First tier

- Increase in both mean and median prices→

- Higher prices increase for works on paper than paintings→
- More accentuated price increase in the dutch auction →

• Higher prices → higher volume of paintings → higher demand → higher

willingness of artists to put their paintings on the market

Before the Boom : the great depression

- 2/3 of art galleries surviving
- Overall art market prices declined by 70%
• 1920:
• 1930:
The booming market
• 1940:
- Dealers with large inventories and liquidity and debt problems → ready to sell
- With german occupation : german market opens again with new buyers
- Looting starts
• Other implications
- Increase of price level due to rising demand:
- Rise of low-quality art entering the market :

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The End of the boom

End of 1944
- German buyers leave
- Restitution policies
Post war Netherlands: monetary purge
Money supply under control through:
- Demonitasion of banknotes
- Temporary block of bank accounts
- Taxes on wartime capital gains
Post war France
- High inflaction issues
- Slower recovery
Part 2- Researching art markets (teacher research about female nudity)

• Common methods
• Repeat- sales regression → price of artwork = time dummy variables for each date
of sales
- Limitations:
*Selection bias
*Long time period required
*Not reflective of the market as a whole
→ A practical example : 1984-2019/ 237 sales of female nude portraits / 20 cases of
repeated sales
• Hedonic regression→ price of artwork= some of the prices of its single material
and non-material characteristics.
- Limitations:
*Relevant IV´ s to be determined → misspecification of variables
*Time consuming for the coding

In my essay do some descriptives :

Location, authenticity, which type of auction was… (mirar en diapo)

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WEEK 8 NOTES: RECENT TRENDS -Back to the present

• The art market: where art and commerce meet

- The eco system: academies, artists, auction houses, art fairs, biennals, galleries,
museums, etc.
- Intermediaries: experts and expertise, media critics, curators > mediate btw art and the
market
- Demand: Economic growth and HNWI, Motivations for art consumption? The
collectors´base
- Historical trends: globalization and segmentation
- External shocks such as wars, pandemics, etc.
• Seminal developments in the art market since 1990
1. Financialization: art as investment
2. Globalization: emerging and new art markets
3. The proliferation of art fairs
4. Privatization of museums
5. Digital revolution
6. The covid pandemic

• Art and the Net: impact overall

- New art forms: digital art
- Connecting the virtual with the material (AR and MR)
- Global participation
- Significant decreases in transaction costs
- Vastly increases our knowledge of the art market
- Empowerment of consumers, democratization.
- The platformization of culture (algorithms)
- Disintermediation of dealers, demystification of institutions
- Commodification of art
- Questions about trust and quality
• A game changer?
- Blackbone of next generation internet
- Smart contracts
- Enhanced provenence and proof of ownership of artworks
- Allows for fractional ownership of art through tokenization
- Created a market for NFT´S
• Non-fungible tokens or NFTs
- One-of-a-kind asset
- Certificat of ownership (tokenized) of none tangible form
- Can be bought and sold, buyer “owns original work”
- But does it make sense?

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 • Corona- immediate effects:
- Travel bans
- Closure of galleries, museums and art fairs
- Postponement of major events and auctions
- Global art trade down by 60% in 2021
• Coping with a crisis: the digital transformation of the art market
- (Private) viewing rooms and e-commerce
- Improving the buyer´s experience, but what about the personal experience?
- The platformization of the art market
• Art market studies: looking for patterns
• Size of the market
• Art history, western perspectives and local traditions
– Artistic reputation
• Fashion makers or fashion takers?
– Role of innovation
– Net exporters of art
• A dealer or collector driven market?
• A free art market (constraints)? Are dictatorships good for art?
• Religion and forms of censorship
• Trust and uncertainty
• Internationalization and globalization: glocalization
• Future developments
– Economic developments and art market trends
• The history of the art market: a teleological narrative?
• What is new?

WEEK 8 TUTORIAL

Question 1. → what has the democratization of the art world with digitalization in social
media implied? (text Arora and Vermeylen)

- Product and process innovation

- Transaction costs
- Difficulty in determining quality
- Active consumption of art → inclusivity
For instance : museums shifted from being custodial institutions to being focused on
audience attraction
- “Participation culture” → consumers and gatekeeprs interact
- Issues of transparency
- Lower information costs → art as investments?

Question 2 . → How has the role of art expertise and art knowledge production evolved
according to Arora and Vermeylen (2003)?

• Early Modern Era:

- Salient Art Expert : Art Theorists and the Guilds
- Selection and Consecration Criteria:
. Renaissance quality criteria explained through treatises on the value of art

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 . Experts explicitly indicated which artists excelled
. Institutions decade for artistic values , hence market values

• 17th and 18th centuries

- Salient Art :
• 19th Century
- Salient Art Expert : Art Academies and Critics ( + Museum Curators, Art Historians
and Gallerists)
- Selection and Consecration Criteria:
*For Academies: High Quality art only if selected for the Salons
*For critics (with rise of impressionism) : Importance of innovation
*Institutions decide for artistic values, hence market values
* Today ?
- Salient Art Expert: The amateur -expert. Secular, trusting, politically liberal, racially tolerant,
open to other cultures and lifestyles.
- Selection and consecration Criteria : artistic perception, creative expression, historical and
cultural context, aesthetic valuing and connections, relationships, applications.

Question 3: What emerges from Velthuis (2014) investigaton of the role of contemporary
fairs, galleries and digitalization ?
• Physical art spaces : Fairs and galleries
- Overall: New global orientation of selection systams merged with artistic values
- The fair model : Winner- takes- all model?
- Fairs over galleries as market players?
- Perceived resistance vs fairs; why?
- Gallert mmodel at risk and too much emphasis on the commercial situation ?

Exam:
- Economic and geographical insight
- Look for questions for each week in class, can you answer it?

- What are the key/concepts terms of this week

- What are the characteristics of

Supply vs demand
High vs low markets
Information problems and uncertainty
Development /changes in the role of stakeholders → which are not implicit in the art market
but it is affected to the art market

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