Penny pinch, a street artist from Chicago, enjoys exploring the finances of the art world. His work—from murals to paintings to tote bags made in collaboration with the Chicago Cubs baseball team—uses looted or donated materials (hence the name). His latest experiment, hosted at A Very Serious Gallery in the north-west of the city, revolves around pricing.
On December 16, Mr. Pinch is to sell 15 paintings, one of which is shown, at a Dutch auction. Each starts at a price of $3,000, which decreases by $100 every hour until a buyer shows up. According to Mr. Pinch and Allan Weinberger, owner of the gallery, it is the first ever such auction of new art (a claim your correspondent could not refute).
Dutch auctions are more commonly used to sell homogeneous commodities such as cut flowers in 17th-century Holland or today’s government bonds. Their use for unique items is much rarer. Mr Pinch says the auction is “an opportunity for people who normally can’t buy large works”. It’s also an opportunity to poke fun at the art world.
The opportunity may come with a cost. As Eric Budish of the University of Chicago notes, the trick to a Dutch auction is knowing where to set the starting price. For Treasuries, the spread is determined using previous auctions. There is no equivalent for Mr. Pinch’s art, which means he risks underpricing and leaving money on the table.
Mr Pinch doesn’t care as he has something else on his mind. At a regular auction, a potential buyer is influenced by the quantity. Calling for an offer indicates a higher potential resale value and status gain if the auction is won. Such considerations are “disgusting”, says Mr. Pinch, which is why he likes Dutch auctions, where they are not possible. If someone else bids, it’s too late. Potential buyers need to focus on how much they appreciate the art, not how others do.
But the experiment has an irony. By launching the first Dutch art auction, Messrs. Pinch and Weinberger could create enough hype to attract exactly the kind of buyers they want to repel – those who are more motivated by status than love of art. ■
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