The value for money stretches from a few hundred dollars (e.g., wine) to millions in expensive paintings. (CEC 7)
The auction sale of private collections may be held either with a certain motif, under a class of the commodity, or the art's genre or given time period. In 1996, Sotheby's sold at auction the estate of Jacqueline Kennedy-Onassis as a collection, while other public dealings were categorized in 'Old Master Paintings' or 'Jewellery'. Sotheby's fiercest competitor, Christie's also hold such glamorous, multi-million-dollar auction events, as the richest of richest of men grace such occasions. (CEC 7)
Although both auction houses hold 'regular' auctions at their subsidiaries throughout the world (Rome, Geneva, Zurich, Amsterdam, Milan, Melbourne and Hong Kong), high-profile auction events are generally held at their London and New York headquarters. (Ashenfelter & Graddy 3-25)
The auction houses, which accept items to be auctioned (on a consignment basis), handle each necessary arrangement for the event, including planning, design and distribution of high-class brochures, advanced publicity as well as viewing opportunities. To facilitate sales, merchandise are sold individually (called 'lots'), even large collections are separated and auctioned as a single item. As seller of the consignor's items, the auction house manages all the account procedures: bills the buyer, remits the consignor the money after the purchase of the merchandise, minus the commission, taxes and other expenses.
The commission is computed within the 'hammer price,' when the item is settled to the winning bidder. Regarded as 'seller's commission' or 'vendor's' commission, a certain percentage is taken from the consignor. The 'buyer's premium,' or a percentage from the hammer price is also charged to the buying public at the auctions (CEC 8).
A percentage of the hammer price, called the buyer's premium, is also charged to people making purchases at auctions. This practice was initially introduced in the main auction rooms of these two auctions giants, sometime in 1975-only a few weeks from each other. Both firms made several changes on this practice through the years (independently from each other), but eventually both of their practices became similar.
Auctioneering is not the only source of income of these two firms as both are engaged in other commercial activities, such as offering loans against the security of works of art. Nonetheless, the main sources of revenues remain the buyer's premium and vendor's commission. (CEC 8)
The turgid exercise of auctioning fine arts produce a discriminating product market effect other than conventional ventures of selling or buying the items that serves the purpose of assessment value, based on the following (CEC 8). Firstly, clients consider the great importance of consigning their items at auctions due to the high standard of publicity for the merchandise. Likewise, consignors achieve the highest possible