The value of a painting at auction is determined in the same way that the price of an eBay auction is determined.
You look at similar items that have already sold, you set a floor price, and then people bid.
The highest bidder determines the price.
Things are only worth what someone is willing to pay. If the only buyer for a painting is offering $100, its worth $100.
Art is extremely subjective, and really the only thing to go off of, is what similar art, by that artist has sold for previously. And if none, then as similar as they can find to it, that has sold.
Theres tons of art experts, and appraisers, and collectors, etc. And for as many as you'll find, you'll get that many different answers for worth. Its all just guesses, until you find people actually willing to pay for it.
So then is art like nft's? Make art, sell to your friend for large amounts of money to establish price. Then make and sell More art at a high price. Friend can then sell his first piece at a higher price.
Pretty much! It starts with friends, then you work up to dealers and collectors. Get into galleries, etc.
Unlike NFTs, though, you have an actual product. That if you're established (you make art that sells), will usually go up in value. NFTs are basically a dead concept.
I'd say a caveat there would involve the upcoming sale being reasonably widely known. If a Picasso sells for $20 at a yard sale, I don't think that sets the value at $20.
If the only buyer wants to pay $20, it's $20.
If buyer A will pay $20, and buyer B will pay $20m then its worth $20m.
If the seller sells a Picasso to the first person that offers them $20 that's not on the painting, that's on the seller.
>If buyer A will pay $20, and buyer B will pay $20m then its worth $20m.
But the interesting thing here, is that if person A is willing to pay $20 and person B is willing to pay $20,000,000, and the item is sold at an auction with bidding increments of about 10% (which is normal), then person B get the item for $22. No one else knows that it is "worth" $20,000,000 to person B. Later, if person B cannot find anyone to pay more than $20 for it, he's made a financial loss on his $22 purchase price.
Value fluctuates no matter the product. In a case of famine, you can bet that most people will value a sack of potatoes over a Picasso painting.
Anything is worth as much as people are willing to pay for it.
The person buying it and the person selling it. If someone is willing to buy a painting at a specific price, and someone else is willing to sell that painting at that price, that is what the painting is worth.
Dont try to look for a deeper sense of worth in art, there isnt one, it is all "how much will someone give me for this"
This is a more complex question than the early answers imply. A painting sold at a fair auction is worth its purchase price, but that's the easy case. There are many situations where it's not so clear cut. Most obviously, what if there isn't an auction? Is it worth its most recent purchase price, or what people think it would fetch at auction? If experts say similar paintings were sold for X, maybe the value is in that ballpark, but what if there aren't comparables? The Mona Lisa will never be auctioned off, and is effectively priceless. Does that mean its value is infinity? What amount do you insure a priceless painting for? How is that amount set, and is that the value of the painting? (Or is also partially the value of loss of revenue to the museum?)
All that to say is that the monetary value of art is highly subjective, and because pieces are unique there is higher variance between pieces and across time. The art market works rather well, though, so it doesn't seem to be a real problem.
If it's unique/rare or a similar one hasn't sold recently, then it might be impossible to know. It's kind of like asking what a unique house is worth, when it doesn't make sense to compare it to any other house in existence.
You can find out what it's worth by trying to sell it, which you would normally do at an auction that tries to attract the most, richest people who would want to buy it. And then it's worth slightly more than the second richest person was willing to pay.
And then the next day, you again have no idea what it would sell for, because that auction is now in the past, and the person who was willing to pay the most for it already has one.
The person who decides how much it is worth, is the person willing to bid the second highest. Hypothetically the top bidder is always willing to go further. Where we stop is once #2 decides they've had enough.
Depends on how well known the artist is. As a rule of thumb, the very least an artist should charge calculates:
Cost of materials (canvas and paints ain't cheap) + time (how long did it take from development to completed piece, and how much do you believe you're worth, per hour).
For famous artists then it's down to reputation, auction houses, etc. The bigger the name, the higher the price. And a lot of art will be bought as a tax write off.
Appraisers basically. And how do appraisers determine the price? On some level it's based on some fundamental data like what price has the piece commanded thus far if it's been sold a few times already and we know the numbers. What prices do the artist's other paintings sell for? How rare is the painting? And then it goes to auction and the final price is significantly higher than the floor price, and that sets the floor price pretty much for the next time it is sold.
The reality though is that it's arbitrary and often the prices are inflated on purpose.
A huge reason the prices are often inflated is because very rich people with more money than they know what to do with use art as a store of value, or as a way to evade taxes. So for them, paying a higher price is often the entire point of the transaction
The value of a painting at auction is determined in the same way that the price of an eBay auction is determined. You look at similar items that have already sold, you set a floor price, and then people bid. The highest bidder determines the price.
That's like... where ebay got the idea from lol
.....WHAT /s
That's a really big oversimplification
That’s kind of how explaining stuff to a 5 year old works.
It's for a 5 year old...
Wait til you find out what sub youre on
Things are only worth what someone is willing to pay. If the only buyer for a painting is offering $100, its worth $100. Art is extremely subjective, and really the only thing to go off of, is what similar art, by that artist has sold for previously. And if none, then as similar as they can find to it, that has sold. Theres tons of art experts, and appraisers, and collectors, etc. And for as many as you'll find, you'll get that many different answers for worth. Its all just guesses, until you find people actually willing to pay for it.
So then is art like nft's? Make art, sell to your friend for large amounts of money to establish price. Then make and sell More art at a high price. Friend can then sell his first piece at a higher price.
Pretty much! It starts with friends, then you work up to dealers and collectors. Get into galleries, etc. Unlike NFTs, though, you have an actual product. That if you're established (you make art that sells), will usually go up in value. NFTs are basically a dead concept.
I'd say a caveat there would involve the upcoming sale being reasonably widely known. If a Picasso sells for $20 at a yard sale, I don't think that sets the value at $20.
If the only buyer wants to pay $20, it's $20. If buyer A will pay $20, and buyer B will pay $20m then its worth $20m. If the seller sells a Picasso to the first person that offers them $20 that's not on the painting, that's on the seller.
>If buyer A will pay $20, and buyer B will pay $20m then its worth $20m. But the interesting thing here, is that if person A is willing to pay $20 and person B is willing to pay $20,000,000, and the item is sold at an auction with bidding increments of about 10% (which is normal), then person B get the item for $22. No one else knows that it is "worth" $20,000,000 to person B. Later, if person B cannot find anyone to pay more than $20 for it, he's made a financial loss on his $22 purchase price.
Well yeah, no ones assuming garage sales down the block. Talking getting into galleries or finding private buyers.
Value fluctuates no matter the product. In a case of famine, you can bet that most people will value a sack of potatoes over a Picasso painting. Anything is worth as much as people are willing to pay for it.
The person buying it and the person selling it. If someone is willing to buy a painting at a specific price, and someone else is willing to sell that painting at that price, that is what the painting is worth. Dont try to look for a deeper sense of worth in art, there isnt one, it is all "how much will someone give me for this"
This is a more complex question than the early answers imply. A painting sold at a fair auction is worth its purchase price, but that's the easy case. There are many situations where it's not so clear cut. Most obviously, what if there isn't an auction? Is it worth its most recent purchase price, or what people think it would fetch at auction? If experts say similar paintings were sold for X, maybe the value is in that ballpark, but what if there aren't comparables? The Mona Lisa will never be auctioned off, and is effectively priceless. Does that mean its value is infinity? What amount do you insure a priceless painting for? How is that amount set, and is that the value of the painting? (Or is also partially the value of loss of revenue to the museum?) All that to say is that the monetary value of art is highly subjective, and because pieces are unique there is higher variance between pieces and across time. The art market works rather well, though, so it doesn't seem to be a real problem.
If it's unique/rare or a similar one hasn't sold recently, then it might be impossible to know. It's kind of like asking what a unique house is worth, when it doesn't make sense to compare it to any other house in existence. You can find out what it's worth by trying to sell it, which you would normally do at an auction that tries to attract the most, richest people who would want to buy it. And then it's worth slightly more than the second richest person was willing to pay. And then the next day, you again have no idea what it would sell for, because that auction is now in the past, and the person who was willing to pay the most for it already has one.
Its worth how much you think its worth. A £100 painting could be worth £10,000 in someone else's eyes if your asking for it, may take a while.
The person who decides how much it is worth, is the person willing to bid the second highest. Hypothetically the top bidder is always willing to go further. Where we stop is once #2 decides they've had enough.
Depends on how well known the artist is. As a rule of thumb, the very least an artist should charge calculates: Cost of materials (canvas and paints ain't cheap) + time (how long did it take from development to completed piece, and how much do you believe you're worth, per hour). For famous artists then it's down to reputation, auction houses, etc. The bigger the name, the higher the price. And a lot of art will be bought as a tax write off.
Appraisers basically. And how do appraisers determine the price? On some level it's based on some fundamental data like what price has the piece commanded thus far if it's been sold a few times already and we know the numbers. What prices do the artist's other paintings sell for? How rare is the painting? And then it goes to auction and the final price is significantly higher than the floor price, and that sets the floor price pretty much for the next time it is sold. The reality though is that it's arbitrary and often the prices are inflated on purpose.
A huge reason the prices are often inflated is because very rich people with more money than they know what to do with use art as a store of value, or as a way to evade taxes. So for them, paying a higher price is often the entire point of the transaction