Reposting an old comment. The art world obeys supply and demand - where demand has no relation to the real world:

If you are more curious about the contemporary art world market and why $29M is not that expensive[1], I recommend "The $12 Million Stuffed Shark: The Curious Economics of Contemporary Art".

In general, brand (in this case Christie's and Sotheby's) ranks supreme above all else. Once you are branded, you can pretty much sell anything as expensive art.

Also, an interesting factoid - when we hear of Far East/Middle East buyers bidding tens of millions (or more) for a painting, we naturally tend to think - who buys that without seeing it - but as the book points out - the painting has most likely gone to see the buyer already (e.g. Dubai/Hong Kong pre-auction private tour).

Excerpts from the book:

"Money itself has little meaning in the upper echelons of the art world -- everyone has it. What impresses is ownership of a rare and treasured work such as Jasper Johns' 1958 White Flag. The person who owns it (currently Michael Ovitz in Los Angeles) is above the art crowd, untouchable. What the rich seem to want to acquire is what economists call positional good; things that prove to the rest of the world that they really are rich."

Jasper Johns' White Flag

http://michaelovitz.blogspot.com/2011/04/weve-featured-this-...

http://www.metmuseum.org/toah/works-of-art/1998.329

Estimates on the artist economy:

"40k artists resident in London (about same number in NYC)

For London and NYC each:

75 superstar artists (>$1M/yr income)

300 mature, successful artists (>$100k/yr income)

5,000 part time artists (need to supplement their income)"

http://www.amazon.com/The-Million-Stuffed-Shark-Contemporary...

[1] "If a great apartment costs $30 million, than a Rothko [big deal famous contemporary artist] that hangs in the featured spot in the living room can also be worth $30 million - as much as the value of the apartment. But no one could envision a $72.8 million apartment to use for comparison..."

This is pretty disappointing, treading over the same old ground - "my daughter could paint that". I was particularly disappointed with the inclusion of the Miro and the Rothko. Those Rothkos are incredibly subtle, and arresting, and enormous, and have dozens and dozens of layers of paint put together in really complex ways that we are still trying to understand. The Tate Modern put on a Rothko show a few years ago and exhibited a cross section of a Rothko (cut out of one of his canvasses that I believe was ruined some other way) and you could see this complexity. These paintings are often very compelling in person, even if they "boring" on the screen of your iPhone or laptop.

Meh, any piece of art in this price range is typically being bought mainly for the right to own "the original" of a piece that had some kind of historically important role. Sure, you can copy lots of things, which is true of older art, too. For rather less than the price of a Picasso you can get a very nice, extremely accurate copy that requires forensic methods to distinguish from the original (though some artists are easier to duplicate precisely than others). But it'd be a copy, and some people are willing to pay millions to "own a piece of history". There's no real reason that'd be different just because the piece of history is 20th-century art history, and/or you don't like the piece or the artistic movement it was part of.

Heck, one of the points of Warhol's art was mass-producing screen prints, and people still pay a lot for an original, rather than a screenprinted reproduction.

Ummmm you could sell your "3 year old nephew's" art for $100,000 but for some reason you haven't? Right....

I do get tired of the old insult to art that "I could do better" but for some reason that person has 'chosen' not to make millions and be famous.

People need to stop fearing things they don't or can't understand.

Are the paintingss absurd? or the price? The author seems to be suggesting that the paintings sold for more than their value, but the market sets the value, not the percieved effort in the creation of the art.

It isn't much different in many other industries. The buyer /market sets the value, not those who aren't in the market.

This seems relevant: http://www.jehsmith.com/1/2013/02/eefin-and-hambone-or-what-...

What gives the appearance of some monopoly on genius to the sort of cultural output that is housed in museums and Lincoln Plaza and so on is just this: that brainless one-percenters are spending huge amounts of money to put their names on these monuments, and the brainless bourgeoisie makes pilgrimages to them, spending medium sums of money to have a brush with cultural objects that supposedly edify by their simple proximity. The illusion that genius is stored up in sites of high culture is sustained by capital and by the laziness and gullibility of culture's consumers: all the season-ticket holders, all the dupes of the museums' advertising departments, for their part driven ever further, under the compulsion of capital, to make the Ottoman sultan's throne, or medieval armor, or Greco-Bactrian statuary, look like so many things to buy-- passing them off as a special class of objects, museum objects, that you can buy in a way just by going and standing in front of them.

The value of artwork (or other non-utilitarian object) is very much subjective. Human value judgements can become absurdly skewed (e.g. [1]) by our interpretation of an object as a status symbol, which can lead us to value in the extreme otherwise useless objects.

[1]: https://en.wikipedia.org/wiki/Tulip_mania

Why does everyone want to count other people's money?

Omg this is so bad, we have great paintings at http://piazzaart.com/