[go: up one dir, main page]
IDEAS home Printed from https://ideas.repec.org/a/eee/jbrese/v145y2022icp595-604.html
   My bibliography  Save this article

To sell or not to sell? Pricing strategies of newly-graduated artists

Author

Listed:
  • Lee, Boram
  • Fraser, Ian
  • Fillis, Ian
Abstract
The paper investigates the pricing strategies of newly-graduated artists and identifies innovative strategies more suited to achieving sustainable practice. Our work is novel in investigating the drivers of discrepancies between artists’ willingness-to-accept (WTA) and potential customers’ willingness-to-pay (WTP). Using mixed-methods, we explore the viewpoints of the ‘public’, by survey, and of ‘newly-graduated artists’ and ‘intermediaries’, by interviews, and interrogate price lists and sales records. Newly-graduated artists find pricing challenging, leading to ‘underpricing’ or ‘over-pricing’. Few artists make sales, reflecting discrepancies between WTA and WTP. Our work has theoretical and practical implications. Pricing reflects the ‘endowment effect’ (Thaler, 1980) and Bourdieu’s ‘avant-garde’ circuit. Our results imply a need for educational institutions and other intermediaries to offer more advice to newly-graduated artists who might benefit from adopting forms of personalized or participative pricing such as ‘Pay What You Want’ and, given the emergence of digital markets, contemporary techniques such as ‘action rules’.

Suggested Citation

  • Lee, Boram & Fraser, Ian & Fillis, Ian, 2022. "To sell or not to sell? Pricing strategies of newly-graduated artists," Journal of Business Research, Elsevier, vol. 145(C), pages 595-604.
    • Handle: RePEc:eee:jbrese:v:145:y:2022:i:c:p:595-604
    DOI: 10.1016/j.jbusres.2022.03.035
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0148296322002697
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.jbusres.2022.03.035?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Jack L. Knetsch & J. A. Sinden, 1984. "Willingness to Pay and Compensation Demanded: Experimental Evidence of an Unexpected Disparity in Measures of Value," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 99(3), pages 507-521.
    2. Boram Lee & Yulia Veld-Merkoulova, 2011. "The persistence of memory of Marilyn: the diversification potential of individual artists," Applied Economics Letters, Taylor & Francis Journals, vol. 18(11), pages 1049-1052.
    3. Stiglitz, Joseph E, 1987. "The Causes and Consequences of the Dependence of Quality on Price," Journal of Economic Literature, American Economic Association, vol. 25(1), pages 1-48, March.
    4. Paul Ingenbleek & Marion Debruyne & Ruud T. Frambach & Theo M. M. Verhallen, 2003. "Successful New Product Pricing Practices: A Contingency Approach," Marketing Letters, Springer, vol. 14(4), pages 289-305, December.
    5. Ginsburgh, Victor & Mei, Jianping & Moses, Michael, 2006. "The Computation of Prices Indices," Handbook of the Economics of Art and Culture, in: V.A. Ginsburgh & D. Throsby (ed.), Handbook of the Economics of Art and Culture, edition 1, volume 1, chapter 27, pages 947-979, Elsevier.
    6. Kathryn Graddy & Lara Loewenstein & Jianping Mei & Mike Moses & Rachel A J Pownall, 2014. "Anchoring or Loss Aversion? Empirical Evidence from Art Auctions," ACEI Working Paper Series AWP-04-2014, Association for Cultural Economics International, revised Jun 2014.
    7. Sebastian Edwards, 2004. "The Economics of Latin American Art: Creativity Patterns and Rates of Return," Economía Journal, The Latin American and Caribbean Economic Association - LACEA, vol. 0(Spring 20), pages 1-35, January.
    8. Alessia Zorloni, 2013. "The Economics of Contemporary Art," Springer Books, Springer, edition 127, number 978-3-642-32405-5, December.
    9. Menger, Pierre-Michel, 2006. "Artistic Labor Markets: Contingent Work, Excess Supply and Occupational Risk Management," Handbook of the Economics of Art and Culture, in: V.A. Ginsburgh & D. Throsby (ed.), Handbook of the Economics of Art and Culture, edition 1, volume 1, chapter 22, pages 765-811, Elsevier.
    10. Baumol, William J, 1986. "Unnatural Value: Or Art Investment as Floating Crap Game," American Economic Review, American Economic Association, vol. 76(2), pages 10-14, May.
    11. Ginsburgh, Victor & Jeanfils, Philippe, 1995. "Long-term comovements in international markets for paintings," European Economic Review, Elsevier, vol. 39(3-4), pages 538-548, April.
    12. Jianping Mei & Michael Moses, 2002. "Art as an Investment and the Underperformance of Masterpieces," American Economic Review, American Economic Association, vol. 92(5), pages 1656-1668, December.
    13. Alfred S. Eichner, 1987. "Prices and Pricing," Journal of Economic Issues, Taylor & Francis Journals, vol. 21(4), pages 1555-1584, September.
    14. G. Candela & A. Scorcu, 1997. "A Price Index for Art Market Auctions," Journal of Cultural Economics, Springer;The Association for Cultural Economics International, vol. 21(3), pages 175-196, September.
    15. Richards, Timothy J. & Liaukonyte, Jura & Streletskaya, Nadia A., 2016. "Personalized pricing and price fairness," International Journal of Industrial Organization, Elsevier, vol. 44(C), pages 138-153.
    16. Susanne Schönfeld & Andreas Reinstaller, 2007. "The effects of gallery and artist reputation on prices in the primary market for art: a note," Journal of Cultural Economics, Springer;The Association for Cultural Economics International, vol. 31(2), pages 143-153, June.
    17. Luc Renneboog & Christophe Spaenjers, 2013. "Buying Beauty: On Prices and Returns in the Art Market," Management Science, INFORMS, vol. 59(1), pages 36-53, February.
    18. Sonnier, Garrett P., 2014. "The market value for product attribute improvements under price personalization," International Journal of Research in Marketing, Elsevier, vol. 31(2), pages 168-177.
    19. Goetzmann, William N, 1993. "Accounting for Taste: Art and the Financial Markets over Three Centuries," American Economic Review, American Economic Association, vol. 83(5), pages 1370-1376, December.
    20. Daniel Kahneman & Amos Tversky, 2013. "Prospect Theory: An Analysis of Decision Under Risk," World Scientific Book Chapters, in: Leonard C MacLean & William T Ziemba (ed.), HANDBOOK OF THE FUNDAMENTALS OF FINANCIAL DECISION MAKING Part I, chapter 6, pages 99-127, World Scientific Publishing Co. Pte. Ltd..
    21. Samuelson, William & Zeckhauser, Richard, 1988. "Status Quo Bias in Decision Making," Journal of Risk and Uncertainty, Springer, vol. 1(1), pages 7-59, March.
    22. Daniel Kahneman & Jack L. Knetsch & Richard H. Thaler, 1991. "Anomalies: The Endowment Effect, Loss Aversion, and Status Quo Bias," Journal of Economic Perspectives, American Economic Association, vol. 5(1), pages 193-206, Winter.
    23. Juanjuan Zhang, 2011. "The Perils of Behavior-Based Personalization," Marketing Science, INFORMS, vol. 30(1), pages 170-186, 01-02.
    24. Reisman, Richard & Payne, Adrian & Frow, Pennie, 2019. "Pricing in consumer digital markets: A dynamic framework," Australasian marketing journal, Elsevier, vol. 27(3), pages 139-148.
    25. James E. Pesando & Pauline M. Shum, 2008. "The Auction Market For Modern Prints: Confirmations, Contradictions, And New Puzzles," Economic Inquiry, Western Economic Association International, vol. 46(2), pages 149-159, April.
    26. Angelini, Francesco & Castellani, Massimiliano, 2022. "Price and information disclosure in the private art market: A signalling game," Research in Economics, Elsevier, vol. 76(1), pages 14-20.
    27. Don L. Coursey & John L. Hovis & William D. Schulze, 1987. "The Disparity Between Willingness to Accept and Willingness to Pay Measures of Value," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 102(3), pages 679-690.
    28. Thaler, Richard, 1980. "Toward a positive theory of consumer choice," Journal of Economic Behavior & Organization, Elsevier, vol. 1(1), pages 39-60, March.
    29. Richard Agnello & Renée Pierce, 1996. "Financial returns, price determinants, and genre effects in American art investment," Journal of Cultural Economics, Springer;The Association for Cultural Economics International, vol. 20(4), pages 359-383, December.
    30. Ningyuan Chen & Guillermo Gallego, 2019. "Welfare Analysis of Dynamic Pricing," Management Science, INFORMS, vol. 65(1), pages 139-151, January.
    31. Steinberg, Etye, 2020. "Big Data and Personalized Pricing," Business Ethics Quarterly, Cambridge University Press, vol. 30(1), pages 97-117, January.
    32. Orley Ashenfelter & Kathryn Graddy, 2003. "Auctions and the Price of Art," Journal of Economic Literature, American Economic Association, vol. 41(3), pages 763-787, September.
    33. Victor Ginsburgh & Jianping Mei & Michael Moses, 2006. "On the computation of art indices in art," ULB Institutional Repository 2013/7290, ULB -- Universite Libre de Bruxelles.
    34. Shogren, Jason F. & Seung Y. Shin & Dermot J. Hayes & James B. Kliebenstein, 1994. "Resolving Differences in Willingness to Pay and Willingness to Accept," American Economic Review, American Economic Association, vol. 84(1), pages 255-270, March.
    35. Thorstein Veblen, 1899. "Mr. Cummings's Strictures on "The Theory of the Leisure Class"," Journal of Political Economy, University of Chicago Press, vol. 8(1), pages 106-106.
    36. Michael Hutter & Christian Knebel & Gunnar Pietzner & Maren Schäfer, 2007. "Two games in town: a comparison of dealer and auction prices in contemporary visual arts markets," Journal of Cultural Economics, Springer;The Association for Cultural Economics International, vol. 31(4), pages 247-261, December.
    37. Richards, Timothy & Liaukonyte, Jura & Nadia, Streletskya, 2016. "Personalized Pricing and Price Fairness," 2016 Annual Meeting, July 31-August 2, Boston, Massachusetts 235809, Agricultural and Applied Economics Association.
    38. Sebastian Edwards, 2004. "The Economics of Latin American Art: Creativity Patterns and Rates of Return," NBER Working Papers 10302, National Bureau of Economic Research, Inc.
    39. Gwendolyn Morrison, 1997. "Willingness to pay and willingness to accept: some evidence of an endowment effect," Applied Economics, Taylor & Francis Journals, vol. 29(4), pages 411-417.
    40. Merijn Rengers & Olav Velthuis, 2002. "Determinants of Prices for Contemporary Art in Dutch Galleries, 1992–1998," Journal of Cultural Economics, Springer;The Association for Cultural Economics International, vol. 26(1), pages 1-28, February.
    41. Abbing, Hans, 2002. "Why Are Artists Poor?," University of Chicago Press Economics Books, University of Chicago Press, number 9789053565650.
    42. R. L. Hall & C. J. Hitch, 1939. "Price Theory And Business Behaviour," Oxford Economic Papers, Oxford University Press, vol. 0(1), pages 12-45.
    43. Michael D. Wittman & Peter P. Belobaba, 2019. "Dynamic pricing mechanisms for the airline industry: a definitional framework," Journal of Revenue and Pricing Management, Palgrave Macmillan, vol. 18(2), pages 100-106, April.
    44. Pascal Courty & Javad Nasiry, 2018. "Loss aversion and the uniform pricing puzzle for media and entertainment products," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 66(1), pages 105-140, July.
    45. Francesco Angelini & Massimiliano Castellani, 2018. "Private pricing in the art market," Economics Bulletin, AccessEcon, vol. 38(4), pages 2371-2378.
    46. Veblen, Thorstein, 1899. "The Theory of the Leisure Class," History of Economic Thought Books, McMaster University Archive for the History of Economic Thought, number veblen1899.
    47. Alper, Neil O. & Wassall, Gregory H., 2006. "Artists' Careers and Their Labor Markets," Handbook of the Economics of Art and Culture, in: V.A. Ginsburgh & D. Throsby (ed.), Handbook of the Economics of Art and Culture, edition 1, volume 1, chapter 23, pages 813-864, Elsevier.
    48. Knez, Peter & Smith, Vernon L & Williams, Arlington W, 1985. "Individual Rationality, Market Rationality, and Value Estimation," American Economic Review, American Economic Association, vol. 75(2), pages 397-402, May.
    49. Yuxin Chen & Oded Koenigsberg & Z. John Zhang, 2017. "Pay-as-You-Wish Pricing," Marketing Science, INFORMS, vol. 36(5), pages 780-791, September.
    50. Sucharita Chandran & Vicki G. Morwitz, 2005. "Effects of Participative Pricing on Consumers' Cognitions and Actions: A Goal Theoretic Perspective," Journal of Consumer Research, Journal of Consumer Research Inc., vol. 32(2), pages 249-259, September.
    51. Pesando, James E, 1993. "Art as an Investment: The Market for Modern Prints," American Economic Review, American Economic Association, vol. 83(5), pages 1075-1089, December.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Fikret Korhan Turan & Zeynep Tosun, 2023. "Sustainable development of art industry and a statistical analysis of the factors that influence the gallery prices of contemporary artworks," Sustainable Development, John Wiley & Sons, Ltd., vol. 31(3), pages 1790-1804, June.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Nauro F. Campos & Renata Leite Barbosa, 2009. "Paintings and numbers: an econometric investigation of sales rates, prices, and returns in Latin American art auctions," Oxford Economic Papers, Oxford University Press, vol. 61(1), pages 28-51, January.
    2. Le Fur, Eric, 2020. "Dynamics of the global fine art market prices," The Quarterly Review of Economics and Finance, Elsevier, vol. 76(C), pages 167-180.
    3. William N. Goetzmann & Luc Renneboog & Christophe Spaenjers, 2011. "Art and Money," American Economic Review, American Economic Association, vol. 101(3), pages 222-226, May.
    4. Charlin, Ventura & Cifuentes, Arturo, 2013. "A new financial metric for the art market," MPRA Paper 50186, University Library of Munich, Germany.
    5. Belma Öztürkkal & Aslı Togan-Eğrican, 2020. "Art investment: hedging or safe haven through financial crises," Journal of Cultural Economics, Springer;The Association for Cultural Economics International, vol. 44(3), pages 481-529, September.
    6. Garay, Urbi, 2021. "Determinants of art prices and performance by movements: Long-run evidence from an emerging market," Journal of Business Research, Elsevier, vol. 127(C), pages 413-426.
    7. Luc Renneboog & Christophe Spaenjers, 2013. "Buying Beauty: On Prices and Returns in the Art Market," Management Science, INFORMS, vol. 59(1), pages 36-53, February.
    8. Fedderke, Johannes W. & Li, Kaini, 2020. "Art in Africa: Hedonic price analysis of the South African fine art auction market, 2009–2014," Economic Modelling, Elsevier, vol. 84(C), pages 88-101.
    9. Fedderke, Johannes W. & Chen, Tinghua, 2023. "Generalizing the “Masterpiece Effect” in fine art pricing: Quantile Hedonic regression results for the South African fine art market, 2009–2021," Economic Modelling, Elsevier, vol. 124(C).
    10. Jianping Mei & Michael A. Moses & Zur B. Shapira & Lawrence J. White, 2010. "Loss Aversion? What Loss Aversion? Some Surprising Evidence from the Art Market," Working Papers 10-10, New York University, Leonard N. Stern School of Business, Department of Economics.
    11. Marinelli, Nicoletta & Palomba, Giulio, 2011. "A model for pricing Italian Contemporary Art paintings at auction," The Quarterly Review of Economics and Finance, Elsevier, vol. 51(2), pages 212-224, May.
    12. Victor Ginsburgh & Jianping Mei & Michael Moses, 2006. "On the computation of art indices in art," ULB Institutional Repository 2013/7290, ULB -- Universite Libre de Bruxelles.
    13. Agnello, Richard J., 2016. "Do U.S. paintings follow the CAPM? Findings disaggregated by subject, artist, and value of the work," Research in Economics, Elsevier, vol. 70(3), pages 403-411.
    14. Etro, Federico & Stepanova, Elena, 2021. "Art return rates from old master paintings to contemporary art," Journal of Economic Behavior & Organization, Elsevier, vol. 181(C), pages 94-116.
    15. Demir, Ender & Gozgor, Giray & Sari, Emre, 2018. "Dynamics of the Turkish paintings market: A comprehensive empirical study," Emerging Markets Review, Elsevier, vol. 36(C), pages 180-194.
    16. Spaenjers , Christophe & Goetzmann , William, 2014. "The Economics of Aesthetics and Three Centuries of Art Price Records," HEC Research Papers Series 1055, HEC Paris.
    17. Douglas Hodgson & Aylin Seçkin, 2012. "Dynamic price dependence of Canadian and international art markets: an empirical analysis," Empirical Economics, Springer, vol. 43(2), pages 867-890, October.
    18. Aylin Seckin, 2006. "Art as an Investment under High Inflation: an Empirical Study on Turkish Paintings," EcoMod2006 272100081, EcoMod.
    19. Michel Clement & Anke Lepthien & Tim Schulze, 2016. "Erfolgsfaktoren bei der Vermarktung von Kunst [Success Factors for Marketing of Arts]," Schmalenbach Journal of Business Research, Springer, vol. 68(4), pages 377-400, December.
    20. Ulrich Schmidt & Stefan Traub, 2009. "An Experimental Investigation of the Disparity Between WTA and WTP for Lotteries," Theory and Decision, Springer, vol. 66(3), pages 229-262, March.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:jbrese:v:145:y:2022:i:c:p:595-604. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/jbusres .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.