Elena Stepanova

The Market for Paintings in Paris between Rococò and Romanticism

We analyze organization of auctions and bidding strategies with a unique dataset on Paris auctions between 700s and 800s. Prices reflect the objective features of the paintings and of the sale, and they reveal a substantial death effect, with upward jumps in the years after the death of the artists. Both the hedonic and repeated sale price indexes show a declining pattern for the relative price of paintings starting with the French Revolution. On this basis we analyze the emerging role and market power of art dealers and employ network theory to study whether they created rings to manipulate the outcome of the auctions for their profits. Dealers appear to have been divided into four main communities heavily trading between themselves and we find evidence of collusive behavior with lower hammer prices for buyers belonging to the same community of the dealers organizing the auction.

Art Collections and Taste in the Spanish Siglo De Oro

We analyze art pricing in a unique dataset on Madrid inventories between 1600 and 1750. Hedonic regressions reveal a number of interesting facts about the taste of Baroque Spanish collectors and the imports of foreign paintings. The hedonic price index shows an impressive increase in the price of paintings (relative to the cost of living) during the XVII century, in line with the Lopez hypothesis for which investment in art increases in wealthy societies without new productive investment opportunities. We examine price differentials between domestic and imported paintings: at the beginning of the century local works were priced substantially below imported paintings, but the price gap is gradually reduced during the century, with an increasing contribution of the younger painters. This is in line with a Schumpeterian hypothesis for which increasing demand induced increasing domestic quality, as priced by the market, and created the conditions for what is known as the Siglo de Oro of Spanish art.

Network Disruption and Recovery: Co-Evolution of Defender and Attacker in a Dynamic Game

The evolution of interactions between individuals or organizations are a central theme of complexity research. We aim at modeling a dynamic game on a network where an attacker and a defender compete in disrupting and reconnecting a network. The choices of how to attack and defend the network are governed by a Genetic Algorithm (GA) which is used to dynamically choose among a set of available strategies. Our analysis shows that the choice of strategy is particularly important if the resources available to the defender are slightly higher than the attackers’. The best strategies found through GAs by the attackers and defenders are based on betweenness centrality. Our results agree with previous literature assessing strategies for network attack and defense in a static context. However, our paper is one of the first ones to show how a GA approach can be applied in a dynamic game on a network. This research provides a starting-point to further explore strategies as we currently apply a limited set of strategies only.

The Market for Paintings in the Netherlands During the Seventeenth Century

We analyze the price of paintings in Dutch inventories and auctions of the Golden Age. The econometric investigation emphasizes correlations between prices adjusted for inflation and characteristics of the paintings, of the painters, of the owners (job, religion, size of the house) and, in case of auctions, also of the buyers. Price differentials for alternative genres, for the characteristics of the traders and the purpose of the inventory tend to disappear after con-trolling for the unobservable quality of paintings with artists fixed effects. The real price of a representative painting declined over the XVII century. We argue that initial high prices were the fruit of the large increase in demand by the Dutch middle class, which attracted endogenous entry of painters. This led to intense competition and the development of cost-saving innovations for mass production (high specialization in genres, smaller paintings, monochromatic styles) so as to gradually reduce prices. We also run a multinomial probit model to verify the Montias hypothesis on the location of paintings between rooms of Dutch houses.

Art Auctions and Art Investment in the Golden Age of British Painting

We analyse the evolution of the price of paintings in London auctions with a unique data set of over 200,000 sales in the period 1780–1840. We build a price index for the representative painting through hedonic regressions controlling for the characteristics of auctions and paintings and for the artists’ fixed effects. The emergence of an efficient secondary art market was an important opportunity for portfolio diversification. Estimating a CAPM model for art investment suggests that British paintings could deliver a higher return compared to imported paintings and an attractive source of diversification relative to the contemporary stock market. This contributed to increase the demand for British art and, possibly, to promote the innovations of its Golden Age. While the representative painting of the British school was initially undervalued, new British painters reached foreign prices by the beginning of 1800s.

Dynamic increasing returns and innovation diffusion: bringing Polya Urn processes to the empirical data

The patterns of innovation diffusion are well approximated by the logistic curves. This is the robust empirical fact confirmed by many studies in innovations dynamics. Here, we show that the logistic pattern of innovation diffusion can be replicated by the time-dependent stochastic process with positive feedbacks along the diffusion trajectory. The dynamic increasing returns process is modelled by Polya Urns. So far, Urn models have been mostly used to study the [path-dependent] limit properties. On the contrary, this work focuses on the transient [finite time] properties studying the conditions under which urn models capture the logistic trajectories which often track empirical diffusion process. As examples, we calibrate the process to match several cases of diffusion of motor ships in European countries.

The impact of color palettes on the prices of paintings

We emphasize that color composition is an important characteristic of a painting. It impacts the auction price of a painting, but it has never been considered in previous studies on art markets. By using Picasso’s paintings and paintings of Color Field Abstract Expressionists sold in Chrisite’s and Sotheby’s auctions in New York between 1998 and 2016, we demonstrate the method to analyze color compositions: How to extract color palettes from a painting image and how to measure color characteristics. We propose two measures: (1) the surface occupied by specific colors, (2) color diversity of a painting composition. Controlling for all conventional painting and sale characteristics, our empirical results find significant evidence of contrastive paintings, i.e., paintings with high diversity of colors, carrying a premium than equivalent artworks which are performed in monochromatic style. In the case of Picasso’s paintings, our econometric analysis shows that some colors are associated with high prices.