The high price of art explained

The value of a work of art depends on the simple formula of supply and demand. It does not matter if the artist is alive or dead. Any work of art from any art movement and any art period can reach a significant value and a high demand among art collectors if rigorous marketing is applied.

An artwork becomes more valuable as more people assign significance to it

The Mona Lisa, well protected and exhibited in Paris, is valued by its insurance company at one billion euros. The marketing operators of the Louvre have presented a smile to the public as a concept. Da Vinci's genius technique lets her gaze straight into the eyes of the viewer. He painted the background and the depicted protagonist from two different angles. Writers, artists, and researchers have wondered about Mona Lisa's smile ever since.

The art market has its own rules.

When a work of art leaves the studio, it is a commodity. To turn it into a desirable and tradable object, it must now be transformed into a product. It is necessary for the work to be both renowned and in high demand.

Art collectors love a good story

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The global art market is not regulated. Art is not subject to prevailing market mechanisms. Dealers operate according to their own rules.

Commerce and art go hand in hand

It is safe to say that without the power of the Internet and own initiative, without imagination and vision, artists like Banksy would certainly not be the best-paid artists today. Regardless of whether one likes his work or not, the form of marketing was successful because the technology was in place.

In the 1970s, economist David Hirsch coined the term "positional good". It describes goods and services that, because of their peculiarity, are not suitable for mass production and whose value is measured by the space they hold on the personal inventory of desirable things.

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5 most expensive artworks by living artists

#	Artwork	Artist	M $
1	Rabbit	Jeff Koons	91 (2019)
2	Portrait of an Artist (Pool with Two Figures)	David Hockney	90.3 (2018)
3	Balloon Dog (Orange)	Jeff Koons	58.4 (2013)
4	Abstraktes Bild (599) (1986)	Gerhard Richter	44.5 (2015)
5	Domplatz, Mailand	Gerhard Richter	37.1 (2013)

Source: List of most expensive artworks by living artists.

Until recently, Americans and Europeans dominated the collector market. In recent years, art enthusiasts from Asia, the Middle East, and Russia have joined the party, expanding the luxury arena.

There is a growing number of real estate tycoons, internet billionaires, hedge fund managers, oil sheiks, casino moguls, and big speculators who are passionate about art. Precious paintings are status symbols and image boosters. The circle of buyers for expensive art is growing.

Empowered collectors

Collectors can influence the art market's price formation. Investing in works of up-and-coming artists increases their asking price. Public exhibitions and a significant internet presence are also tied to this development. An artist must be hyped to establish value in the art market.

Art Price Tag

Art industry's opaque relationship with price transparency has changed. Prices are now available to VIP collectors, as well as the general public. That creates greater consumer trust. Art collectors are delighted about the shift to online trading.