Western aesthetic convention represents an accrual of inherited societal perspectives on the artist, the artifact and its consumer. A review of its history and the etymology of its terminology discloses a twofold problem. The first aspect concerns the separation of the manufacture of aesthetic objects from their economic raison d'etre. The second involves the categorization of these artifacts into art or craft. This problem is compounded when considering Western judgements on non-Western aesthetics. Inuit handicraft provides an appropriate model to illustrate the fact that present convention and nomenclature prove inadequate in addressing both intra and especially extra-cultural concerns. A broader and more inclusive orientation is needed.

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The rise and growth of online social networks have spurred tremendous changes in our understanding of human behavior. Social scientists and companies have devised new tools to analyze the vast amounts of data obtained from these networks. Such advances have had two major consequences. First, it has allowed firms to significantly improve their segmentation and targeting strategies. Second, it also modified how problems are conceptualized. For example, books, academic papers, or webpages are now being studied under methods developed for social network analysis. This dissertation contributes to both applications. Essays 1 and 2 describe efficient targeting strategies in situations where access to information or computing power is costly. Although existing “seeding” methods have been quite successful in social networks, they often do not account for firms' limited computing power or assume that firms are omniscient. Essay 3 focuses on the art industry by conceptualizing paintings as items connected to each other in a network through their visual similarities. Indeed, we still do not perfectly understand what makes art financially valuable and even major auction houses are at awe when paintings are sold at prices multiple times higher than what they expected. In particular, we aim to quantify how an art piece's visual features and historical importance may impact prices and assess how auction houses and their marketing efforts may modify how art is evaluated and valued. This dissertation has three essays. In the first essay, we analyze how the friendship paradox, which states that your friends have more friends than you, may be generalized to situations where relationships are asymmetric. Indeed, the result assumes symmetric relations: if two people are friends, then each is the other's friend. For social networks that satisfy this assumption (e.g., Facebook), the friendship paradox implies that firms can potentially achieve faster and more widespread diffusion of information by seeding it with the friends of a group of people than with people in the group itself. We generalize the result to allow one-sided (leader/follower) relations and examine the implications for seeding in social networks where messages can be sent only by a leader to his/her followers. We obtain necessary and sufficient conditions under which the highest number of followers is obtained by seeding with (1) leaders, (2) followers, and (3) individuals chosen by ignoring the distinction between leaders and followers. We examine the seeding implications of the results for a subset of Twitter users. The second essay furthers our understanding of the friendship paradox and relates it to beta centrality and eigenvector centrality. We generalize the results to asymmetric relations, define two beta centrality measures and relate them to the singular vectors of the associated directed graph. Our first generalization shows that the expected number of k removed friends is no smaller than the expected number of k-1 removed friends when k is an even number. Such a relation does not necessarily exist when k is an odd number. As k increases to infinity, the limiting value of the expected number of k removed friends converges to the largest eigenvalue of the associated undirected graph. We interpret beta centrality to be a weighted sum of an infinite series of the numbers of k removed friends. It approaches eigenvector centrality when the weighting parameter becomes arbitrarily close to the inverse of the limiting value of the expected number of k removed friends. We further generalize these results to asymmetric relations (say, between followers and leaders) that can be represented by directed graphs. We show that the last person in a randomly selected alternating sequence of 2k+1 leaders and followers (followers and leaders) has no fewer followers (leaders) than the last person in a randomly selected alternating sequence of 2k followers and leaders (leaders and followers). As k increases to infinity, the expected number of leaders of the last person in a randomly selected sequence of 2k alternating leaders and followers converges to a value proportional to the largest singular value of the associated directed graph. Similarly, the expected number of followers of the last person in a randomly selected sequence of 2k alternating followers and leaders converges to a (different) value proportional to the largest singular value of the associated directed graph. We show that there is a reciprocal relation between the limiting expected values of leaders and followers. We generalize beta centrality to asymmetric relations and relate the limiting values of beta centrality scores for followers and leaders to the singular vectors of the associated directed graph. The third essay focuses on the art market. Auction houses hold auctions regularly throughout the year. However, once or twice a year, art investors and wealthy consumers attend highly selective marquee events: day and evening sales. Those carefully designed and highly marketed events often generate a lot of excitement for connoisseurs as most paintings get sold for tremendous amounts of money. But what makes those paintings special? We investigate how art is evaluated across those three types of auctions. Specifically, we build a deep learning model to summarize the paintings into a low dimensional representation space where each factor encodes a specific feature of the paintings’ aesthetics and further utilize those components to create “network” variables that will determine how influential and creative a painting is. We use those predictors in hedonic regression models to study how art returns differs across the three types of sales and subsequently analyze whether the paintings are evaluated differently. In particular, we find that paintings sold in evening sales generated an annualized return of 14.33% in the period 1999-2018 - more than three times the returns of paintings sold in regular or day auctions. Finally, we adopt a propensity score matching approach to create a homogeneous population of paintings - based on their likelihood to be auctioned in an evening sale - to assess the causal impact of being featured in an evening sale and find that such highlight increases a painting's price by almost $6 million.

This thesis explores factors that determine the price for Australian art sold at auction. Using a large data set that comprises over 20,000 sale observations of Australian paintings sold between 1995 and 2003 characteristics associated with the artist, the work and auction are included in a series of hedonic models. In addition to modelling the overall market, differences within defined market segments for Indigenous and Non-indigenous art are explored. The role of artist identity and critical acclaim, the period in which art works are created and the event of an artist death are areas of specific focus within the analysis along with an investigation of the risks and returns associated with Australian art investment. It is found that artist identity is a crucial factor that drives price. Further, the most highly valued Non-indigenous art works are found to be created prior to 1900, although the market for Contemporary art produced post 1980 is associated with relatively high prices also. Distinctions emerge between Indigenous and Non-indigenous art as we consider the period in which works are created and the influence this has upon price. Almost 90 per cent of Indigenous art sold at auction has been created since 1970 and it is works from the 1970s that command the highest prices for Indigenous art sold at auction. This is not unexpected given the rise of Indigenous art in the early 1970s coinciding with the emergence of the Papunya Tula art movement. The death of an artist also proves to have a different influence upon price when we compared Indigenous and Non-indigenous art. For Non-indigenous art there is clear evidence of a death effect upon art prices, where prices typically rise around the time of an artists death before falling back somewhat with the passing of time. For Indigenous art the influence of a living artist's conditional life expectancy upon price proves to be of greater relevance in explaining price where as the artist ages and the term of their life expectancy reduces prices tend to rise. The analysis within this thesis finishes with the construction of a number of short term art price indices where it is found that returns to investment in Indigenous art are generally higher and less risky compared to Non-indigenous art. Australian art generally and Indigenous art in particular is found to have a relatively weak correlation with the stock market suggesting that Australian art has a role to play in a balanced investment portfolio especially taking into account the aesthetic utility that can also be derived as a result of holding art. The research contributes to understanding how the auction market for Australian art operates with emphasis paid to the distinctions and similarities observed within the sub-markets for Indigenous and Non-indigenous art. Insights from this research have the potential to inform public policy on a number of issues including the effect of resale royalties upon the operation of the auction market, and how indigenous economic development may be facilitated through a strong market for Indigenous art.

For the most recent contemporary art no art historical or price records exist that can testify of its value. However, the market for contemporary art is enormous and the art historical interest in it is equally important. If we can find out how to evaluate contemporary art, it will further the art historical understanding, the market transparence and the sales of contemporary art thus having an influence also on the creation of art (William Grampp). The art historical verdict and the market verdict are linked. This has been proven by a number of economists (Frey, Galenson, Grampp). The question is how they are linked. Basically, both art history and the market contribute to the creation of value in art. What is it that makes art valuable? What are the criteria used in art history and in the market to evaluate art? The focus is on European and US American art between 1970 and today. Evaluation, be it aesthetic or financial, is a process of decision making. Decisions are based on criteria that must be conscious at least after the decision is made (Clement Greenberg). In the art world, certain decision makers are more influential than others. Therefore the dissertation analyzes the most influential positions in art theory and in the art market and distills the essential criteria used. The dissertation seeks to advance the research on this fundamental question of the evaluation of art through a more comprehensive and interdisciplinary study than those previously undertaken. It presents a model that integrates the most important criteria from both sides and allows a more reliable evaluation of contemporary art. The 3C Model explains the ensemble of Quality-Value-Price through three criteria: Change, Connectivity and Context (Time, Space, People). The 3C Model can be used as a general basis in the discourse on value and quality. It is a structural method that can be applied to almost any art from any period. The model is exercised here using Gerhard Richter, François Morellet, Julian Schnabel, Jeff Koons, Sophie Calle and Pipilotti Rist as examples. / text