Art experts and auctions Are pre - sale estimates unbiased and fully informative

Public sales art catalogues include low and high pre-sale price estimates by experts. This makes it possible to analyze whether pre-sale estimates are unbiased predictors of realized prices. Unbiasedness is tested using a sample of some 1,600 lots of English silver auctioned by Christie's and Sotheby's. Results show that estimates are slightly (but significantly) biased and that experts do not use all the information that is available to them when they make their estimates. Published in Louvain Economic Review 66(2000), 131-144 (special issue on art markets) * We are grateful to Laure Dorchy who made her data on English silver available to us and to Russell Davidson, Renato Flores, Michiel Keyzer, Costas Meghir, José Paris and Ariane Szafarz for many useful comments and discussions. Kathryn Graddy, who played the role of the usually anonymous referee, also deserves many thanks for her comments on the one before the last version. Financial support from the Belgian Government under Project PAI P4/01 is gratefully acknowledged.