Governance under the shadow of the law: trading high value fine art

Abstract

The market for paintings by well-known artists is booming despite widespread concern about art crime and difficulties in establishing provenance. Public law enforcement is imperfect, and court cases often are deemed problematic. So how is the thriving art market governed in practice? We analyze the protocols used by the top auction houses to identify and resolve problems of illicit supply—fakes, forgeries and items with defective legal titles—through the lens of institutional analysis. We uncover a polycentric private governance system in which different actors govern distinct but overlapping issue areas, motivated by profit, prestige, or the search for truth. When the financial stakes rise, opportunistic behavior undermines the credibility of private governance. We argue that as litigious, super-rich investors entered the art market, the interaction between public law and the traditional private governance system restricted the supply of “blue chip” art, driving the escalation of prices.

Interpretation of Online Artworks of Digital Art Design in the New Media Environment

“…In the new media drama, the role of stage art gradually presents multipolarization, that is, “behind the scenes” role, “script” role, “character” and “actor” role, and “director” role. Besides the “behind the scenes” role, other roles are becoming more and more important, and some roles even play a decisive role in the benign development of new media drama [ 14 ], for example, the role of “actor” and “director”; the extension or transformation of the stage art role of this kind of drama is almost difficult to see in the past traditional drama performance, which is unimaginable for the current formal or routine new media drama, and may also be based on the “actor-centered theory.” “Director-centered theory” for the singing tone of the dramatic art actor or director is unwilling to imagine. In any case, the continuous embarrassment and confusion of new media drama are prompting us to think about “change,” “change when poor, change when flexible, and general for a long time.” The proposition of stage art of new media drama is changing, and the action of breaking the topic is bound to change.…”

Intermediary liability and trade in follow-on innovation

“…Anecdotal evidence suggests that Sotheby's salesrooms in London, Hong Kong, and Dubai do not seem to engage in regulatory arbitrage. They are also governed by the laws of the state of New York as houses tend to choose the toughest laws to govern transactions which can enhance their international reputation (Shortland & Shortland, 2020). For this reason, we rerun alternative specifications inserting a dummy variable that identifies auctions located abroad but governed under the auspices of a U.S. headquarter (results not shown).…”

Intermediary Liability and Trade in Follow-on Innovation

“…As large auction houses with U.S. headquarters operate on multiple sites across jurisdictions and so, in some instances, subsidiaries outside the U.S. might also be exposed to legal changes and increased uncertainty. Anecdotal evidence suggests that Sotheby's sales rooms in London, Hong Kong and Dubai do not seem to engage in regulatory arbitrage and are also governed by the laws of the state of New York as choosing the toughest law to govern transactions can enhance the companies' international reputations (Shortland and Shortland, 2020). For this reason, we rerun alternative specifications inserting a dummy variable that identifies auctions located abroad but governed under the auspices of an U.S. headquarter (results not shown).…”