Banksy’s “Girl With Balloon” Auctioned off for $1.4 Million, Then Resold For $25.4 Million
Banksy began graffiti art in Bristol in the 1990s. Now, he is world-renowned, taking over the streets of major cities, from Vienna to Paris to Detroit. Unlike typical graffiti, his signature is the use of stencils to create his art and many of his pieces have some sort of political or emotional meaning behind them. He said he liked “the political edge” that stencils gave. To him, “all graffiti is low-level dissent, but stencils have an extra history. They’ve been used to start revolutions and to stop wars,” (Smithsonian). Although Banksy doesn’t make art for the money, ironically he acknowledges, his pieces have been auctioned off at insanely high prices, reaching over $1 million. He states that, “the irony that his anti-establishment art commands huge prices isn’t lost on him,” (Smithsonian).
One example of this can be seen with his piece, “Girl With Balloon”, auctioned off for $1.4 million in 2018. The type of auction held for Banksy’s art is known as an Ascending Bid, or an English Auction. This kind of auction is where the price will keep on increasing based on people’s bids until there is only one bidder left. In this case the dominant strategy would be to stay in the auction until the price reaches your value. It wouldn’t make sense to drop out before the price reaches your value since you could have continued, and it wouldn’t make sense if you overbid your value since now your payoff would be higher off than you would have wanted.
In this case the highest value out of all the bidders amounted to $1.4 million. Shockingly, the second the piece was sold, it began to self-destruct by partly shredding itself with a remote-controlled mechanism hidden in the frame. What may be even more shocking was that after the piece had been partly shredded, it was resold in 2021, now titled “Love Is in the Bin” for $25.4 million; a record. This increase in auction price indicates that the bidders’ values actually increased after the stunt had been pulled. Looking at the different possible auction types, an Ascending Bid Auction probably makes the most sense in this particular situation. The new shredded piece was estimated to sell anywhere from $5.5 million to $8.2 million. The price it was actually auctioned off at was significantly higher than the initial projections. This shows that if another type of auction were to take place, such as a Descending Bid Auction, the seller would not have made as much as they did, since Descending Bid Auctions start at a set high price, and it drops until someone accepts the price.
https://www.smithsonianmag.com/arts-culture/the-story-behind-banksy-4310304/
https://www.nytimes.com/2021/10/14/arts/design/banksy-art-sothebys-auction.html