- Observable persuaders: A longitudinal study on the effects of quality signals in the contemporary visual art market
- Award date
- 17 November 2016
- Number of pages
- Document type
- PhD thesis
- Faculty of Economics and Business (FEB)
- Amsterdam Business School Research Institute (ABS-RI)
Information about the quality of producers or products has strategic value and affects economic decisions. But what happens in markets with informational gaps because quality is difficult to observe directly and objective criteria to make quality judgments are lacking? Quality that is indiscernible or indeterminate or latent means to a large extent that it remains unknown to all parties involved in the transaction or even thereafter. Signals – e.g., reviews, awards, prestigious affiliations, past sales – may act as observable persuaders and reduce uncertainty caused by informational imperfections. At the same time, signals may shape future perceptions buyers and intermediaries have about those producers, and this may lead to a competitive advantage for a select few. Effectively, even seemingly inconsequential rewards or benefits gained by being the subject of a signal may grant some producers access to opportunities not given to others. Such preferential treatment could lead to superior performance that could start self-reinforcing feedback mechanisms, which could result in persistent performance for some producers compared to the rest.
In the empirical setting of the primary market for contemporary visual art, the career trajectories of 1,590 visual artists from two prestigious art institutions in the Netherlands are studied. A multi-dimensional approach is taken in analyzing quantitative characteristics of signals and qualitative attributes of sources conveying those signals, and examining these effects on not only different categories of buyers and intermediaries but also in the context of the particular career phase of the producers. The empirical results show strong self-reinforcing processes governing competitive dynamics, offering a fine-grained understanding of a source of inequality in the distribution of success in this market where quality differentials among competing producers are imperfectly observable, information about their underlying quality is imperfect and/or incomplete and objective measures for evaluation are lacking.
- Research conducted at: Universiteit van Amsterdam
Thesis (complete) (Embargo up to and including 17 November 2018)
Chapter 2: Picking the cream of the crop: A study on the effectiveness of jury selection to a prestigious art academy (Embargo up to and including 17 November 2018)
Chapter 3: Looking forward to the past: The effects of past sales and signals on expert buyers (Embargo up to and including 17 November 2018)
Chapter 4: Crossing the threshold and exiting nascency: Antecedents to gaining full-fledged legitimacy (Embargo up to and including 17 November 2018)
Chapter 5: Sequences and consequence: The effects of the first sequence of signals from highly credible third party sources on long-term sales performance (Embargo up to and including 17 November 2018)
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