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Monday, September 30, 2013

Motivations and biases - Detroit art appraisal

Nolan Finley wrote in the News over the weekend that he's had some conversations with Detroit officials leading him to believe that the DIA will certainly be "monetized". The target number he was throwing around is $500 million to somehow be extracted from the DIA's assets. He mentioned that if the auctioneers value the collection at $3-4 billion, the DIA is probably safe, but the higher the valuation, the more likely the DIA will be raided.

I agree with the last statement, though this brings into question the objectivity of the auction houses in their assessments. Unless they have signed an agreement indicating that they would not participate in any auctions of DIA art, they would seem to have an inherent incentive/motivation to inflate the value of any art they appraise, as it would increase the chances that some art would be "monetized" and that they could earn a commission on such "monetization." Certainly, the auctioneers cannot be seen as independent/objective appraisers of art without such a clause.