Pricing Dilemma in Contemporary Art

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Why does a stuffed shark cost 12 million dollars? I have always believed that beauty is in the eye of the beholder; I also believe that art is human beings most forward expression of beauty. So, what is it worth? Is it worth what ever you are willing to pay? Or what some specialist says its worth? This doubts made me wonder: what is the process to pricing art? Prompted by the necessity to write about a pricing dilemma, I started doing a little research, and found the book “The $12 million stuffed shark” (hence the title of my paper) where the author, Don Thompson, takes you through a journey on the economics of the art world. It taught me that the economics of art can be fickle and volatile, but nonetheless, its price index is growing (see Exhibit 1) and is expected to continue to do so. For example, how much would you pay for the following painting? Initially I though, well it looks like a nice poster, I would pay maybe $50 dollars to make my living room look cool. That painting is called “Apocalypse Now” by Christopher Wool and sold for $15.2 million dollars in 2014! Using the insights from Thompsons book, annual reports from artprice.com, other reports and interviews of contemporary artists, I developed this paper. It consists of 3 chapters: (1) players in a contemporary art transaction (2) pricing process of contemporary art (3) psychology of the buyers. I. Players in the Contemporary Art World I grew up around many contemporary artists; my father is a photographer and multi-disciplinarian artist and my house was always filled with starving contemporaries. When I asked him his view on pricing in the art world he said “el precio del arte es una ingeniería de especulación, es un baile entre el curador y el millionario” meaning: “pricing art is engineering speculation, it is a dance between the curator and the millionaire.” This put into business terms

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