Velthius does a nice job taking the often curious behavior of art world players and explaining them with standard economic models. Why do dealers price primary market paintings at half their auction value? Why does a culture of favoritism and gift giving trump a transparent market model? How do dealers think about pricing the work of an artist for their first gallery show? Through a serious of interviews, data analyses, and observations, Velthius tackles these questions and many more.
The author pays particular attention to the competing worlds of aesthetics and commerce that must uncomfortably coexist in the art world. On the one hand, art world players insist that economic considerations are crass where beauty and scholarship should reign supreme. But at the end of the day, dealers are businesspeople who need to pay rent, support their artists, please collectors, and support themselves.
If you're hoping to use this book to price art or predict future prices, you'll probably be very disappointed. The book makes some very rudimentary empirical observations that should be obvious to anyone even casually involved in the art world (larger paintings are more expensive than smaller paintings for a given artist), but the author concedes that pricing is too idiosyncratic to hope to build anything approaching a robust pricing model.
While this book waxes academic, it should be pretty readable to anyone with a rudimentary background in economics. The art world jargon is kept to relative minimum. If you're looking for a breezy, entertaining read, I'd strongly consider The $12 Million Stuffed Shark: The Curious Economics of Contemporary Art.