Experience and Brokerage in Asset Markets: Evidence from Art Auctions

Focusing on the art market, where auction houses act as brokers between art sellers and buyers, we investigate whether more experienced brokers achieve better performance as information providers and matchmakers. We find that houses with artist‐specific experience are more likely to achieve a sale and provide more precise pre‐sale estimates. These findings suggest that experience in a specific market segment plays an important role for brokers to reduce illiquidity and opacity in markets with asymmetric information. Our analysis also shows that specific experience matters above and beyond other house‐specific factors, including reputation and market power.