Artwork pricing mechanism and price reference group in Tehran auction
12 February 2022
This article was written by Mohammad Reza Moridi and Mohammad Javad Mohammadi and has been published in the book "Economics of Iranian Art". Pricing works of art is an important but ambiguous part of the art market. Arbitrary evaluations and pricing that only create symbolic value for the work and even prevent the sale of the work add to this ambiguity and reduce the buyer's confidence in the art market. Lack of aggregation of sales data of works and non-registration of sales statistics by galleries aggravates the situation of "information asymmetry" in the art market. But the performance of auctions is a little different. Auction sales information and the publication of estimated prices and sales prices make the art exchange market more transparent. This article will explain how auction houses, in the "multilateral art monopoly market", play a leading role in the pricing of works and how the price reference group operates in the auction pricing mechanism. Also, by studying the performance of the Tehran auction, the price reference group will be searched in four periods of this auction. The research results provide a criterion for pricing works in the market.
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