Theoretical Models of Art Prices: A Comprehensive Review with Applications for Arts Management

(disponible en anglais seulement)

[VERSION EN PRÉPUBLICATION]

Corrado Botta

Corrado Botta is a Post­doctoral Researcher at Bocconi University’s Department of Manage­ment and Technology and Research Fellow at the Institute for European Policymaking. He holds a PhD in Analytics for Economics and Manage­ment from the University of Brescia. His research focuses on quantitative finance, venture capital performance, market microstructure, and entrepreneurial finance.

ABSTRACT

This paper provides a comprehensive review of theoretical models that explain art price formation with specific attention to their applications in arts management practice. The survey addresses fundamental questions about art market behavior: why collectors accept low financial returns, how artist mortality affects prices, what role intermediaries play in price discovery, how information problems shape market outcomes, what drives trading patterns and holding period effects, and how behavioral biases affect art market dynamics. Findings from cultural economics, financial economics, industrial organization, and behavioral economics are synthesized to understand how theory explains the peculiarities of art markets while providing actionable frameworks for gallery directors, auction houses, and digital platform managers. The review identifies key theoretical contributions, evaluates their assumptions and predictions, highlights practical applications for decision-makers in arts organizations, and suggests directions for future research that bridge academic theory and industry practice.

KEYWORDS
Art finance; asset pricing; information asymmetry; market microstructure; digital platforms; art management