Quote from: MichaelBliss on September 26, 2014, 05:09:33 PM

Quote from: duke1839 on September 24, 2014, 03:01:53 PM

Nice one! I had almost forgotten about this story. Although this particular case has nothing to do with the current surge in art prices, I'm glad you brought it up for a different reason. These two companies had colluded to fix auction prices. Of course Austrian economists will say that price fixing schemes are inherently unstable as both companies have a bigger incentive to ignore the agreement that to abide by it. But try explaining that bit of game theory to a jury that already views these companies as being for stuffy rich people. A jury may not understand game theory but the government does.

Price fixing cases were extremely difficult to prosecute because they relied on one company defecting to the government and putting themselves at risk for prosecution. The solution the government devised was to automatically grant immunity to the first company that defects to the government even if they are the more guilty party. Even if the whole thing was their idea and they convinced the other company to go along with their scheme. That's exactly what happened here. Christy's convinced Sotheby's to go along with their scheme and Christy's also defected to the government first about the scheme. Your government rewards dishonesty from businessmen.

Yeah I remembered this when I read your OP. I'm cynical and just don't see any market that isn't being manipulated. Seems the prices of art have gone up along with the prices of empty mansions where I live (Vancouver, Canada), coinciding with all the quantitative easing. As if the 1% were dumping all their money into these assets. No bubble here though. Wink

Bitcoin is the only asset which seems to be in a downtrend. With Quantitative Easing almost stopping, I expect the trend to reverse.