Revisiting the uncollectable artwork
I think, but I’m not sure, that I’m a key vector through which A Tool to Deceive and Slaughter started going viral: my blog entry on the artwork got picked up by Tyler Cowen (and others) before the artist, Caleb Larsen, was interviewed by Wired.co.uk in a story which was then Slashdotted. The work, which was originally priced at $2,500, had a couple of days to go when I blogged it, but didn’t end up selling in that auction.
When the piece automatically relisted itself, however, the bids started rolling in, and the latest bid is $4,250 with over 4 days to go. Since no one bought the work in the previous auction, all of that money is going to go to Larsen (and possibly his gallery).
So here’s one question: say that you put in a bid after seeing my blog entry, and won the piece for $2,500. Would you be sitting on an immediate profit of $1,750 right now, less $262 for Larsen, who gets 15% of any appreciation in value? Or is the fact that Larsen is still the seller one of the reasons for the work’s current price?
It would seem to be reasonably obvious that the higher in value this auction goes, the greater the probability that it will mark the highest point in the piece’s long-term price trajectory, which could weirdly undercut the whole point of the piece. Let’s say that it sells for $10,000, and that the buyer then immediately lists it on eBay for its new market value of $10,000. If it doesn’t sell at that level for a few weeks or months, there’s a good chance that it will never again reach that level.
So what happens when the winning bidder has owned the piece for a while? Here’s what the contract says:
Upon purchasing the Artwork, Collector may establish a new value for the Artwork. The new value may not exceed current market expectations for the Artwork based on the current value of work by the Artist. This value may be reassessed quarterly. This value will be set as the minimum bid of the auction.
This language, it seems to me, allows the winning bidder to keep the minimum $10,000 price tag on the artwork more or less in perpetuity. It’s justifiable the first time around, and then going forwards the winner has only a right, and no obligation, to reduce that price tag if the market value falls. (The value may be reassessed quarterly, but it doesn’t have to be.)
If the buyer wants to sell the work, then, perhaps because eBay starts charging her an insertion fee every week, she can bring down the price to something more likely to clear. But if she likes it and wants to keep this seemingly uncollectable artwork for herself, she probably can — at least until someone is willing to pay more than she did for it.
The upshot is that there’s a decent chance of a rather ironic outcome to this auction: that the piece which constantly sells itself on eBay only ever gets sold once, by the artist to a collector. Just like a normal work of art which never tries to sell itself at all.