Bubbles, Booms, and Busts: The Art Market in 2008

Posted on July 21, 2008 

Bubbles, Booms, and Busts: The Art Market in 2008

How can a dead, stuffed shark be worth $12 million? Yes, that’s how much Damien Hirst’s famous shark — showcased in his artwork “The Physical Impossibility of Death in the Mind of Someone Living” — sold for in 2005. The buyer was a wealthy financier named Steve Cohen.

If you are wondering, price competition has not vanished from the marketplace: Eddie Saunders, a British electrician, caught a shark and displayed it in his shop two years before Mr. Hirst’s project hit the market. Mr. Saunders later tried to sell his dead shark for about one-fifth the price, and probably that sum was negotiable downward. The offer received lots of press coverage but no interest on the buying side.

If you think that one inanimate shark is as good as another, your understanding of the art market is, as they say, dead in the water. Mr. Saunders’s piece just didn’t have the same quality or caché. (Although Mr. Saunders did claim his shark was more handsome.) Most important, it’s not just about the work of art; rather, the value placed on a particular work derives from how it feels to own that art. Most art dealers know that art buying is all about what tier of buyers you aspire to join, about establishing a self-identity and, yes, getting some publicity. The network of galleries and auction houses spends a lot of its time, money, and energy giving artworks just the right image. Remarkably, buyers support the process in the interest of coming out on top, rather than fighting it and trying to get the lower prices.

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