Trust and Transparency in the Art Market

The Art Newspaper has an interesting article on trust and transparency in the art market.  The article states that while trust is important and a key part component of building relationships, verifiable information, provenance and  price transparency are necessary for future growth.

Basically they are saying the art market, be it dealing with a gallery or an auction, collectors need to be able to trust, but the equation is not complete until the collector can also verify.

The Art Newspaper reports

Art-world participants are particularly adept of navigating the choppy waters of competing interests. Like the Roman god Janus, dealers and auction houses often face in two directions at once. Contemporary galleries, for example, promote and position their artists in a cultural discourse while meeting the commercial realities of a business. Auction houses broker deals between consignors and buyers with directly competing interests who want the best price for works.

What makes the art world special is that at the top end it is a truly global marketplace of rare and high-value objects, inhabited by a few big players whose whims can move the market. Even at the middle and lower ends, to survive the uncertainty of a market built on the fickleness of taste, successful businesses rely on something vaguely termed “trust”.

There is widespread belief that trust, in all its forms, is at the heart of the art world. Individuals rely on trust-based relationships for transactions where handshake deals are the norm. A purchase at major international art fairs is sealed not with a written and signed contract but with an understanding. International institutions such as Sotheby’s and Christie’s build their brands on the strength of the reputations of their experts and the personal relationships they forge with long-standing clients.

Trust can broadly be understood as the expectation that an exchange partner will not behave opportunistically—they will not take advantage of you even if it could benefit them.

At the heart of trust is the willingness to accept vulnerability within a relationship. By definition, if you trust someone, you do not check up on them. But if you don’t check, you will never know for sure. “Trust, but verify”, the old Russia proverb, was the title of the conference keynote address by Orley Ashenfelter, a professor of economics at Princeton. 

Source: The Art Newspaper