Yale School of Management

The Business of Art: Art Auctions


Art is a peculiar investment.  Unlike pure financial investments, art promises no financial dividends nor any claims on “hard” assets.   Nevertheless, many investment advisors consider art to be a reasonable asset class for some portion of their clients’ wealth.  How should we think about art as an asset class?  How would you even begin to think of the “expected return” to art investment?  What kind of data would we need in order to construct an index of the art market?  How would such an index compare to indices for stocks?

The secondary market for fine art is dominated by the international auctioneers Sotheby’s and Christie’s, which collectively have approximately 90 percent of the market (by value).  Why does this duopoly seem to be a stable equilibrium?  Why is it difficult for other competitors to enter?  Why has this duopoly persisted into the internet age, and do you expect it to persist into the future?

Raw, online
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Teaching Note:
Suggested Citation:

Andrew Metrick, ‘The Business of Art: Art Auctions,” Yale SOM Case 08-033, May 23, 2008.

  • Women in Leadership
  • Arts Management
  • Investor/Finance

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