Abstract: Sell in Good Company: Social Capital as a Strategic Tool in the Fine Art Auction Business
The ways intangible capital, and social capital in particular, makes players' actions more productive and efficient have been discussed early in the history of social sciences and further elaborated in economics. This paper discusses the impact of social capital on securing business in the tertiary art market and presents the first results of a study on the ways experts benefit from social capital during the consignment process, the most critical stage for success in the auction business. Focusing on social capital theory and considering aspects from strategic management, the present paper analyzes the process of obtaining consignments on Russian paintings in Finland from 2000 to 2007, concentrating on concepts such as competence, social skills, trust, and reputation. The sudden increase in prices, competition for market shares, and the challenging problem of paintings with uncertain attributions are considered to emphasize the role of social capital in the expert relations in this market. The managerial implications of the results of this paper suggest that social capital benefits the experts in securing consignments when used as a strategic tool in developing expertise, customer encountering, and value assessment. Results point to social capital being valuable in the strategy of fine art auctions.