If your closest supermarket had only one can of baked beans on the shelf, its price would skyrocket — or there would be a riot, which is, in fact, the newsy outcome of “bargain basement” shopping where open bidding is not in place.

In truth, every market transaction is the auction of a unique item.

Auction houses can “set” whatever price they imagine, but that does not -cause- the price at auction. Neither does the last price paid determine the next offer.

When the mafioso asked “What are these worth?” Mickey Blue Eyes was only quoting Ludwig von Mises: “Whatever someone want to pay.”

However, there still is a problem in seeing auctions as reducing market uncertainty, well in fact, ONE kind of uncertainty, the one regarding the levels of demand and supply. In this case, you assume some kind of magical adjustment between supply and demand. It is very hard to sociologically prove the influence of these forces on the market player’s behaviour.

Apart from this, I agree with you, the appraisal definitively reduces uncertainty regarding the product itself. I guess Peter’s story about the real estate agent made this clear. Some people are there to make you focus on the “wrong” and the “right” criteria. I guess though this is compatible with what I put forward in my post. The appraiser plays a role in “definining” the product in a certain way (by selecting the “correct” criteria of valuation) so that it “fits” in a the “world” it will be put into through the auction (the world of art dealers and top collectionners).

@Peter
I guess the level of de-qualification/requalification (to use Callon’s terminology) in the case of an art piece is just as high as say, in the case of the IPad. Now consider the sheer amount of “audiences” an art piece has during its existence (both simultaneously and successively) :
- The “general public” which values them as pedagogical instruments and as objects of national pride
- The art historian who sees the art piece as an object of academic enquiry
- The collectionner who might just see profit in it…
- The specialist…
Once an art piece passes through an auction, it is only one among other stages in its “life”. Rather than passage from singularity to singularity I guess we can talk about passage from singularity to… singularity. Now of course, the people I mentioned above compete during an auction to buy the same piece. But it would be interesting to know how their criteria of valuation differs, and how it is influenced by the “advice” given by the appraiser. Maybe we could see the work of the appraiser as striking a compromise between all these different spheres.

At first I thought you were making a case against the notion of ‘fundamental value’, which is in fact a fascinating argument (see here for some of the people we’re reading in class’ take on the thing, esp. Ezra Zuckerman’s.

But then you turn to the role of specialists as doing the work of as integrating singularity into a good. So for you, it’s not turning art from singular to common, it is that art begins as common and is turned into singularity by specialists? Provocative. It works better in your example of a technically innovative product (or better, to make a ‘boring’ commodity something salable and exciting). But I’d love to hear you say more about this, here or in class.

If you don’t agree that the monetary value of singular art pieces is uncertain before auction houses legitimize a price, then what factors do you think the work’s value might be dependent on?

This is especially hard to answer, I would think, if this is the artist’s first time at auction. No one really considers the intrinsic value of artworks anymore (as compared to in early Renaissance painting, for example, where the value of the pigments determined the price of the painting).

I’m assuming this question has not ever been answered. Otherwise, we would not be constructing a whole research project around it. Still, it’s interesting to think about.