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When a master dies: Speculation and asset float

Penasse,J.N.G.
; 
Renneboog,Luc
; 
Scheinkman,Jose
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%).
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2021-08
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Tilburg University Research Output Collection
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hhab006.pdf
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Keywords
alternative investment, auction, art auction, short selling constraints, trading volume, resell option, pricing models, economics of art, artist death, premature deceas, G12 - Asset Pricing ; Trading Volume ; Bond Interest Rates, P34 - Financial Economics, Z11 - Economics of the Arts and Literature, D44 - Auctions
Citation
Penasse, J N G, Renneboog, L & Scheinkman, J 2021, 'When a master dies : Speculation and asset float', Review of Financial Studies, vol. 34, no. 8, pp. 3840-3879. https://doi.org/10.1093/rfs/hhab006
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https://hdl.handle.net/20.500.14602/74304
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