When a master dies: Speculation and asset float

J.N.G. Penasse, Luc Renneboog, Jose Scheinkman

Research output: Contribution to journalArticleScientificpeer-review

Abstract

An artist's death constitutes a negative shock to his future production; death permanently decreases the artist's float. We use this shock to test predictions of speculative trading models with short-selling constraints. As predicted in our model, we find that an artist's premature death leads to a permanent increase in prices and turnover; this effect being larger for more famous artists. We document that premature death increases prices (by 54.7%) and secondary market volume (by 63.2%).

Original languageEnglish
Pages (from-to)3840-3879
JournalThe Review of Financial Studies
Volume34
Issue number8
DOIs
Publication statusPublished - Aug 2021

Keywords

  • alternative investment
  • auction
  • art auction
  • short selling constraints
  • trading volume
  • resell option
  • pricing models
  • economics of art
  • artist death
  • premature deceas

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