Not all is as it would seem at auctions wrote Judith H. Dobrzynski:

• Most of the audience members you see at big name auctions aren’t actually bidders. Those applauding are spectators. The real bidders are on the phone or in overflow rooms.
• Some of the bidders may actually be hired by the artists themselves to drive up prices and protect their reputations.
• The auction houses will set up the offerings so that the item that is likely to sell for double or triple its expected price goes first, setting the tone for the rest of the auction.
• In general, it makes sense to start the bidding low. People will think they might just be able to afford it at the lower price…and will slowly nudge themselves higher as they try to hang in.
• Art owners are increasingly expecting guarantees on the price they’ll receive. In order to do so auction houses will contact potential buyers in advance, meaning that the auction is, at times, a mere formality.
• Potential buyers will be wined and dined, and an auction house may even take a piece of art to their home for a couple days so that the buyer can see what it would look like in their gallery.

Read our previous coverage on why auctioneers speak so fast here.

And read the rest of the article which contains many more details, including ways that headline prices at auctions are driven up here.

Source: The New York Times

Via: Marginal Revolution