Christie’s + Sotheby’s Art Auctions
The article I chose to analyze is titled “Sotheby’s and Christie’s Race to Find New Art Collectors.” This piece was written by Kelly Crow, a journalist for the Wall Street Journal, a respected source for world and financial news both in the United States in abroad. The article Describes how the top art dealers (Sotheby’s and Christie’s) have been searching for new high net worth clientele to generate bigger sales at their auctions. This initiative has been successful too, as a quarter of all their auction sales were made by first time buyers this calendar year. The content of this article addressed material we have covered in class, in particular the concepts of willingness to pay and auction type. Discussions of these topics are found in Chapter 9 of Professor Easley and Kleinberg’s textbook.
One of the major concepts that was discussed in class lecture and highlighted in this article is the idea of willingness to pay and identifying reasons for why auctions occur in the first place. Art is one of the quintessential items to be auctioned, because it is difficult to determine a buyer’s willingness to pay for the artwork. This is because the items sold at these high-end auctions are unique pieces, which makes its price is very much determined by the preferences and tastes of the individual rather than market forces. This article talks extensively about finding those people with a very high WTP, and discussed how this search has taken Sotheby and Christie representatives all across the world to track down and find wealthy art fanatics. These efforts are paying dividends as of August 2014, Christie’s had fielded bids from individuals in over 170 countries.
Additionally, the article also alluded to the auction type, and it appears that they engage in an ascending-bid auction structure in the showroom. This can be deduced as the article mentioned the individual running the sale as having to “toggle three telephones to field overlapping bids.” The auction referred to in this description, Christie’s May 13, ended up selling $745 million worth of art.