Understanding price formation in the art market through expert interviews

Abstract

This paper investigates how prices are formed in the contemporary art market, a space defined by symbolic value, strategic opac-ity, and institutional gatekeeping rather than transparent economic logic. While existing research highlights the importance of artist reputation, market trends, and aesthetic appeal, little is known about how these factors are understood and operationalised by the key actors who set prices. Drawing on fourteen in-depth interviews with art dealers, auction house professionals, advisors, and collectors across primary and secondary markets, this qualitative study reveals that pricing is a multidimensional process shaped by reputation construction, emotional resonance, provenance, market segmentation, and strategic withholding. Rather than following fixed formulas, price formation is a fluid negotiation embedded in narratives, social capital, and perceived legitimacy. Emotional factors—what some call the “aesthetic dividend”—and evolving expectations regarding transparency also play a central role. By focusing on the life experiences of market participants, this research uncovers the informal and often hidden logics of valuation, offering a more grounded and relational understanding of how art acquires monetary worth. The findings suggest that future research should integrate qualitative insights with quantitative modelling to better capture the complexity of cultural markets.