A gallerist and an economist walked into an art gallery opening. The paintings on display featured the rape of dismembered corpses. The economist was horrified, but the gallerist said the work was good and the artist had a promising career. The gallerist was right. The artist is now a hot, emerging artist whose work sells for tens of thousands of dollars.

This is precisely what makes the art market baffling to outsiders. You’d think the value of art would depend on its aesthetic value; a picture you enjoy looking at on your wall. How could a dismembered corpse artist be remotely successful? Yet these paintings were classified as desirable by the art market.

To understand why, you must first understand the economics of art galleries in America and Europe. Almost all primary art sales—art bought from the artist as opposed to another collector—occurs through art galleries. Galleries set taste and prices—sets is actually an understatement. Galleries manipulate prices to an extent that would be illegal in most industries.

Read more at: High-end art is one of the most manipulated markets in the world