Auctions of all kinds are a huge part of our lives. The ads that appear in Google searches are placed through auctions among advertisers (by computers, of course, not someone with a gavel). A survey of the auction field in 2021 looked at auctions in “timber, construction and services procurement, oil and gas leases, online auctions, internet advertising, electricity, financial securities, spectrum, as well as used goods.” The authors, Ali Hortaçsu and Isabelle Perrigne, wrote that “it is quite striking” that six of the people awarded Nobel prizes in economics since 2001 have publications on auctions.
The kind of auction you choose should depend on what you’re selling: “horses for courses,” as Paul Klemperer, an auctions expert at Oxford University, likes to say. That’s what makes Penny Pinch’s auction this week unusual. A descending price auction seems like the wrong horse for this course. It’s over abruptly, which makes sense for everyday items but not so much for artwork, where art-loving bidders customarily ponder their willingness to pay as the price rises.
Penny Pinch told me that he enjoys the excitement of a Dutch auction for art, in which a bidder who comes in high can win a piece before anyone else even notices his or her presence. (The starting prices are being posted on Wednesday, and the auction will begin online on Friday. The price of each of the 61 works will drop by $100 each hour until it’s sold, so not exactly rapid-fire.)“For me the subversion is what’s interesting,” he said. “I really don’t care about the economics.” He produces a lot of paintings — around 250 a year for sale — which keeps prices low. It also means that a person who misses out in one auction will probably be able to score a piece later.
Because Penny Pinch has chosen not to put a reserve price on any piece, the price of one or more could go all the way to zero. That would be unacceptable to your typical professional artist. Many want to impress collectors that the value of their works is steadily rising, so if they sense any weakness in demand they tend to pull their stuff off the market. I asked him how he would feel if a work attracted no bids and somebody carted it off without paying anything. “Part of me secretly hopes it does,” he said.
I also asked him what makes him an anticapitalist. “I’m not trying to burn down the government or anything,” he said. “I like to live as simply as I can and consume as little as I can. With capitalism, one of the things that often frustrates me is that there’s winners, but there’s also losers. I would love in my own life, which is the only thing I have control over, for there not to be losers.”