The role of Dutch auctions and lotteries in shaping the art market(s) of 17th century Holland

This article examines institution-formation in the nascent art markets of 17th century Amsterdam and Haarlem in response to external and internal pressures on artists' guilds. In Amsterdam, poor quality imports, often copies, were touted as originals and sold in clandestine Dutch auctions. The deliberate confusion about quality imparted to the market features similar to those of Akerlof's ''lemons'' model, and a need for quality guarantees gave occasion to dealers. In Haarlem and other towns, demand was viewed as fixed and guilds toughened restrictions on the supply side. Dissenters successfully used lotteries to show that demand can be engendered. Promotion was to become a key feature of later art markets.