We use a unique historical data set (1741-1913) of all London-based art auctions to capture the role of information acquisition in the development of a trading network for dealers and its effect on artwork prices. We explore how the network size, depth of interactions, and similarities in art specialization between trading partners influence the decision to form new links. We find that, a larger and deeper trading network exacerbates informational asymmetries among buyers, leading to a price advantage. We show that information transmission through a network of experienced dealers is important in determining the price they pay - a factor that has been overlooked so far in the literature.
|Number of pages||30|
|Journal||European Economic Review|
|Publication status||Published - May 2022|
- l14 - "Transactional Relationships; Contracts and Reputation; Networks"
- d82 - "Asymmetric and Private Information; Mechanism Design"
- d44 - Auctions
- art dealers
- trading networks
- Art dealers
- Trading networks