Orley Ashenfelter and Kathryn Graddy Works of art and culture are sold by many means. These include transactions between dealers and their customers, auctions with open outcry, and even, occasionally, sealedbid auctions. However, the standard procedure for establishing art valuations is most commonly the English auction, where prices ascend in open bidding. (The primary, but not the only, alternative is the Dutch auction, where the auctioneer starts at a high price and reduces it until a bidder is found.) How ‘English auctions’ really work Many people think they understand the rules of an English auction because they are so commonly used.1 Sotheby’s, Christie’s, Phillips and the other English auction houses have invented and refined these rules over two centuries, and they are now common in many other parts of the world. It is well known that in an English auction the bidding begins low and edges upward as bidders escalate their bids. When the bidding stops, the item for sale is said to be ‘knocked down’ or ‘hammered down’. The price at which an item is knocked down or hammered down is called the ‘hammer price’. What is not so well understood is that the items knocked down have not necessarily been sold. Here is the reason. The seller will generally set a ‘reserve price’, and if the bidding does not reach this level the item will go unsold. Auctioneers say that an unsold item has been ‘bought in’. (This terminology is somewhat misleading since the auction house rarely buys...
You are not authenticated to view the full text of this chapter or article.
Elgaronline requires a subscription or purchase to access the full text of books or journals. Please login through your library system or with your personal username and password on the homepage.
Non-subscribers can freely search the site, view abstracts/ extracts and download selected front matter and introductory chapters for personal use.
Your library may not have purchased all subject areas. If you are authenticated and think you should have access to this title, please contact your librarian.