Academia de Studii Economice Bucuresti

Amfiteatru Economic
AN ECONOMIC AND BUSINESS RESEARCH PERIODICAL
Facultatea de Business si Turism

Reservation Prices and Pre-Auction Estimates: A Study in Abstract Art

Author:Calin Valsan, Robert Sproule

JEL:D440, G120, Z110

DOI:

Keywords:Art Auctions, Abstract Art, Pre-auction Estimates, Reservation Price, Bias

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.
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