and the Brillo Box
by Don Thompson
|Publisher||Palgrave Macmillan & Co.|
‘Most consignments from individuals reach the auction room through the four D’s: Death, Divorce, Debt, and Discretion. The fourth refers to a change in collecting focus — pursuit of a different passion, or redecorating, or simply profit taking.”
Those words were written by economics professor Don Thompson, and while they would seem to apply to the classic car auction market, they were written in Thompson’s latest book, The Supermodel and the Brillo Box.
The supermodel is not a vintage Ferrari racer, nor does the box of soap pads have anything to do with scrubbing suspension components clean. Thompson’s subject is, as the book’s subtitle explains, “Back Stories and Peculiar Economics from the World of Contemporary Art.”
What, you might ask, does contemporary art have to do with classic cars? Well, it turns out, quite a bit, at least when it comes to buying and selling and the motivation for both actions. I recently heard Don Thompson being interviewed on the radio, bought the book, read it and have been recommending it, first in conversations with some of the folks I know who work in the classic car auction industry and now with you, because you should be as informed as possible when you venture out to an auction as a bidder or a spectator.
Speaking of spectators, Thompson writes that at pretty much any auction, “There will be no more than 30 active bidders in the auction hall, with perhaps 40 bidding by telephone or Internet. Many attend… not just because they are a place to be seen, but because they offer the fascinating spectacle of people bidding amounts that are unimaginable to many in the audience.”
The assumption that the auction process produces a reasonable price… through interacting bids from participants is simply wrong [because] from the moment that multiple bidders seek the same lot, the auctioneer’s role is to play on rivalries and egos, to encourage bidders not to back down.”
— Don Thompson
[/pullquote]He also writes about how “the auctioneer is central to the choreography and psychology” of the event; that “telephone bidders are essential to the perceived importance of a lot;” that the board in the front of the room that shows the current bid in various currencies isn’t there for what would appear to be the obvious reason because “every bidder is perfectly competent to calculate their bidding positions in the auction currency [but] the board is there to signal the global status of the event;” and that “the assumption that the auction process produces a reasonable price… through interacting bids from participants is simply wrong [because] from the moment that multiple bidders seek the same lot, the auctioneer’s role is to play on rivalries and egos, to encourage bidders not to back down.”
And he explains how auctioneers are taught the endowment effect of cognitive psychology and how this in particular impacts the underbidder, who on ensuing lots will pay even more not to lose again.
Though his subject is contemporary art, which includes some very wacko stuff being sold at ridiculous, eight- and even nine-figure prices, in many cases you could change the words “contemporary art” to “collector cars,” aside from those huge numbers. For example:
“No auctioned work ever appears at auction described as having come from an acrimonious divorce, or from a banker under indictment. At the bottom of the catalog entry is the selling price estimate, which seems quite reasonable given the back story.”
Back story, which includes celebrity ownership, or as Thompson notes, “if they think it was even touched by a celebrity” is a big deal with contemporary art — and with classic vehicles. Consider the difference in value of a car or motorcycle once owned by Steve McQueen compared with the same model without the King of Cool being mentioned in the catalog description.
Thompson also writes about the impact on prices of the recent growth in the number of UHNWs, the acronym for Ultrahigh Net Worth Individuals, and the fact that they aren’t just Americans or Europeans anymore, but increasingly are from the Middle East, Russia, China, or anywhere else on the planet.
Thompson writes not only about the auction action but about the role of dealers, which we also have in the classic car marketplace. He writes of the symbiotic relationship between auction houses and dealers, but also of the growing popularity of major art fairs, something with which I don’t see a true parallel in the classic car world. Thompson explains that the dealers launched these fairs, such as Art Basel Miami, as a sort of counterbalance to the marketplace dominance of the auction houses.
Obviously, not everything in the world of contemporary art sales applies to classic cars, but enough does to make The Supermodel and the Brillo Box a meaningful read.
Oh, and the supermodel is a big-game hunting-style trophy sculpture of Stephanie Seymour while the Brillo box is a work by Andy Warhol. Each sold at auction for figures even more shocking than that of the nude supermodel.
You become a collector when you buy a painting and realize that you have no more room on your walls to hang it.”
— Michael Findlay
[/pullquote]And one final note: Have you ever wondered if you’ve made the transition from classic car owner to classic car collector? Thompson quotes art dealer Michael Findlay on this subject – just change the word “painting” to “classic car” and the phrase “on your walls to hang it” to “in your garage to park it:”
“You become a collector when you buy a painting and realize that you have no more room on your walls to hang it.”