Surviving in the marketplace : The importance of network connectivity for art dealers

De Silva, D.G. and Kosmopoulou, G. and Pownall, R. and Press, R. (2023) Surviving in the marketplace : The importance of network connectivity for art dealers. Economics Letters, 231: 111312. ISSN 0165-1765

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Abstract

This paper investigates the relationship between a dealer’s network and their ability to survive in the market using a dataset of 19th-century English art transactions. We find that dealers who purchased artworks from central sellers, and thus developed high hub centralities, survived in the market longer compared to their counterparts. This effect persists even when controlling for the quantity of works purchased, suggesting that more than just higher activity was at play. The paper builds upon previous empirical work showing that art dealers use their network connections to obtain less noisy signals about artworks’ value, resulting in a competitive edge in the market. The findings have implications beyond the art market, adding to a body of literature that suggests network connections help firms long term sustainability surviving in an uncertain marketplace.