Download This PaperReservation Prices and Pre-Auction Estimates: A Study in Abstract Art
22 Pages Posted: 6 Mar 2006 Last revised: 15 Jan 2008
Date Written: July 2007
Abstract
Using a sample of European abstract art we show that reservation prices constrain pre-auction estimates in such a way that we are more likely to observe overestimation relative to the midpoint of the estimation window. At the same time, we also find that the low pre-auction estimate is a more powerful, accurate and precise predictor of hammer prices than the high estimate.
Keywords: Art Auctions, Abstract Art, Pre-auction Estimates, Reservation Price, Bias
JEL Classification: D44, G12, Z11
Suggested Citation: Suggested Citation
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