“One Question” with Don Thompson

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Don Thompson is a professor and economist at the Schulich School of Business, specializing in marketing, economic regulation, and strategic planning. He has taught at the University of Toronto, Harvard University, and the London School of Economics, and holds an M.B.A. and Ph.D from the University of California, and an LL.M from Osgoode Hall Law School. Thompson has served as a consultant to government agencies and organizations in Canada, the US, the UK, France, Australia, Israel, China, Thailand, Laos, Oman, Sri Lanka and Turkey, consulting for companies as diverse as Procter & Gamble, IBM, Wal-Mart and British Airlines. He is the author or co-author of nine books.

About his new book: The $12 Million Stuffed Shark: The Curious Economics of Contemporary Art

Why would a smart New York investment banker pay $12 million for the decaying, stuffed carcass of a shark? By what alchemy does Jackson Pollock’s drip painting No. 5, 1948 sell for $140 million?

Intriguing and entertaining, The $12 Million Stuffed Shark is a Freakonomics approach to the economics and psychology of the contemporary art world. Why were record prices achieved at auction for works by 131 contemporary artists in 2006 alone, with astonishing new heights reached in 2007? Don Thompson explores the money, lust, and self-aggrandizement of the art world in an attempt to determine what makes a particular work valuable while others are ignored.

This book is the first to look at the economics and the marketing strategies that enable the modern art market to generate such astronomical prices. Drawing on interviews with past and present executives of auction houses and art dealerships, artists, and the buyers who move the market, Thompson launches the reader on a journey of discovery through the peculiar world of modern art. Surprising, passionate, gossipy, revelatory, The $12 Million Stuffed Shark reveals a great deal that even experienced auction purchasers do not know.

Neoteric Art: What made you decide to write a book on the economics of the contemporary art scene?

Don Thompson: I have long had an interest in contemporary art, and over a number of years have attended evening auctions at Christie’s and Sotheby’s in New York and London. I teach in a graduate business school, and a regular question from friends was “What is the process by which someone selects the art and artists that make it to this pinnacle of the contemporary art world [the evening auctions]”, and “Why does so much contemporary art sell for ten or a hundred times what I think it should – especially given that the artist is still alive and producing, there is no scarcity factor as with Impressionist art?”

And my answer, always delivered with some embarrassment because I was supposed to be able to answer marketing questions, was “I have no idea!”

A couple of years ago I took a year off to answer these questions, spending the year with auction house specialists and dealers, collectors and artists, in New York and London. The book, The $12 Million Stuffed Shark: The Curious Economics of Contemporary Art, is my answer.

To my amazement, it turned out others were curious about the same question. The book is now in ten languages, including Korean and Czech.

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