The Economics of Art Forgery

Lorenzo Zirulia (University of Milan)
Massimiliano Castellani (University of Bologna)
Francesco Angelini (University of Bologna)

Abstract

The main goal of this paper is then to identify which conditions are more conducive to art
forgery. This could help in designing policies that could curb the forgery phenomenon.
To do so, we set a model with two strategic players, a (potential) forger, and the buyer. We
study the incentive to create a forged artwork and, possibly, make it circulate in the market.
The role of other agents, such as the expert–who can help the buyer identify a forgery–and the
dealer–who could hire an artist to paint a fake–is also considered. We also allow the buyer to
discover the forgery with a certain probability, which can capture repression effort, detection
ability due to scientific advancements, and the copied artist being dead or alive. Detection of
a forgery leads to a loss for both the forger (e.g., a fine or other type of punishment) and the
buyer (e.g., a reputational loss); the former is a possible policy tool to be studied, together with
any intervention that could increase the probability of detection and/or reduce the cost to call
an expert to verify the authenticity upon purchase.

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