Wednesday, September 1, 2010

New Acquisition: The Great God Pan Is Dead by Gary Panter

Gary Panter has this really cool thing he does. He allows you to commission art from him for a highly reasonable cost!
Limited time offer 3.0. Customized drawing by GP for you. 6 x 8" ink-drawing on 3-ply Strathmore bristol. On the subject of your choice (within reasonably wide parameters of taste). You provide one-to-three keywords (see samples below) and the artist will free associate thereupon. The drawing will be signed to your name or initials.
He charges $225 for them. I had one made in 2004 and decided to celebrate a year of blogging with a new one. In 2004, I hadn't thought too hard about art values, but now that I have, this deal that Panter offers is very interesting to think about. Panter writes:
Often I am selling art objects for thousands of dollars and I hope to continue doing that; however I realize that a lot of the people who like my work don't have thousands of dollars with which to purchase fine art. So for a limited time, I am offering this reasonably-priced little drawing in case you do want a drawing by me for you.
So how does he price these drawings? If Gary Panter drawings were interchangeable commodities, the price would be no higher and no lower than the market price. If he priced them significantly lower than the market price (determined by auction), there would be an opportunity for arbitrage. A buyer could buy as many custom drawings from Panter as possible for the low price and then sell them for the market price (at a profit). Depending on how many drawings Panter could produce, the market price would gradually decline as the market was flooded with new 6x8" Panter drawings.

So Panter should definitely not price the drawings lower than the market price according to this logic. Can he price them higher? Yes. Because they are unique items, and because they are commissioned, the buyer is getting something she will want more than anyone else. They are more valuable to the person who commissioned them than to the market as a whole. So according to this logic, his price should be either the market price or the market price plus a premium.

But wait! Panter is primarily a painter. But his paintings, as he says above, go for many thousands of dollars. Many collectors don't have that kind of money now, but will later. (As people age, their earning power increases.) Panter may be engaging in a strategy of enticing beginning collectors, who have relatively little money to spend on art, into collecting his work. As one learns in marketing, the best predictor that someone will buy something from you is if they have done so before. (This is a far more powerful predictor than any demographic or psychographic measure.) So Panter is creating Panter collectors by offering inexpensive art in hopes that they will eventually buy more expensive art from him. By that logic, he should sell for less than the market price.

But that still leaves him open to arbitrage, which he doubly doesn't want--one because he doesn't want these drawings flooding the market and pushing the market price down, and two, he doesn't want the people buying these drawings to be mere speculators (as anyone engaging in arbitrage is), but rather collectors who may buy again in the future. So he creates a "poison pill" that might (might) make these drawings less valuable in the market--he personalizes them. The one I just got says:


So if you are buying Panter drawings on the open market, you probably don't want one that is personalized to Robert Boyd. Or, all other things being equal, you would prefer one that wasn't so personalized.

Given all these considerations, I suspect Panter is underpricing these drawings. But it would take more research than I am willing to do to find out for sure. In any case, I think this is a great program Panter is doing, and I would encourage other artists to do something similar.

Oh, and by the way, here is the piece I bought.

Gary Panter

Ah, bliss.

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