In the end, the question “What is judged to be valuable contemporary art?” is determined first by major dealers, later by branded auction houses, a bit by museum curators who stage special shows, very little by art critics, and hardly at all by buyers. High prices are created by branded dealers promoting particular artists, by a few artists successfully promoting themselves, and by brilliant marketing on the part of branded auction houses.

From Don Thompson’s The $12 Million Stuffed Shark: The Curious Economics of Contemporary Art, London: Aurum, 2008, p. 27.

Addendum (February 27, 2008)

Thompson’s branding process is an attractive notion. The key characteristic of an economic process is that the outcome of an economic agent’s endeavor cannot be known before its time. That is, the uncertainty of ultimate outcome cannot be removed in advance. The making of a branded artist goes through a number of stages, such as exhibitions and auctions, each of which is dominated by an agent who stands to gain in the process. In the end, only a small number of artists make it all the way through, but the gains to all those involved along the way can be tremendous. If everything goes well, his or her works gain in value by several orders of magnitude in a few years. The branding process creates value as it unfolds, and it unfolds ever faster. To be successful, it cannot but apply to a very small number of artists, either. The notoriety of a branded artist and all of his or her helpers is otherwise unimaginable. And so is the rocketing value of the art. The upshot of all this is that the question “What is judged to be valuable contemporary art?” is largely determined by sheer luck in the merciless weeding that is at the core of the branding process.