Beyond Primary and Secondary: Authenticity Concerns in the ‘Tertiary’ Art Market

October 2023

A lack of standards in due diligence of authenticity typifies the secondary art market, a notion that becomes even more extreme in the context of what might be termed the ‘tertiary art market’.

Max Gaisser, The Merchant's Treasures, 1889

Key Takeaways:

  • A lack of standards in due diligence of authenticity typifies the secondary art market, a notion that becomes even more extreme in the context of what might be termed the ‘tertiary art market’.
  • If the price of an artwork attributed to a major artist seems too good to be true, it is.
  • Without the oversight of authenticators and trusted market participants, the tertiary art market is a fertile ground for the entry of forgeries into the market.

Definition: The tertiary art market refers to the market that exists beyond the domain of trusted sellers and buyers, oftentimes with significant degrees of separation between the artwork, the seller and the buyer.

The primary art market encompasses the trading of artworks for the first time, most often between an artist, a dealer and a collector while the secondary market refers to works that have been sold at least once before, whether through public or private sale.  While the vast majority of art market transactions exist within the domain of the primary and secondary markets, a significant number of known forgeries have, at one point, been traded on the tertiary art market.

Although the term ‘tertiary art market’ has been used to refer to the trade of work that has already passed through primary and secondary markets, in the vein of provenance researcher Angelina Giovani-Agha, we believe that it is important to redefine this term to refer to include not only outsider opportunism but also the exchange of works beyond the domain of major auction houses and galleries. This includes the opportunism of sellers hoping to take advantage of unsuspecting buyers, unscrupulous buyers hoping to purchase works they believe have been wrongly refused sale from major auction houses and galleries as well as individuals simply seeking to make a commission on a sale. This could be described as an ‘outside market’ in which, oftentimes, sellers ignore missing provenance histories and lofty attributions to make a quick, low-value, low-quality sale.

When transactions are not mediated by trusted market participants, collectors, unknowingly or knowingly, expose themselves to severe risks of forgery, misattribution and fraud. As with the art market in general, in the tertiary market, if the price of an artwork attributed to a major artist seems too good to be true, it is. Buyers participating in the tertiary art market are at a higher risk of investing in works which will either be rejected when they eventually arrive at the doorstep of a major auction house or gallery or flop when they appear at public sale.

It is not uncommon to see ‘London Art Market, 1980s’ or ‘New York Market, 2000s’, for example, appear in the provenance history of paintings offered to auction houses and galleries. Such transactional opacity is not only a major problem in terms of ascertaining a meaningful provenance of the work but it also signals to an artwork’s exchange in the tertiary market. Artworks traded on this ‘tertiary market’ are not liquid assets in the same way as fully authenticated primary or secondary works because, while there is no regulatory standard of due diligence for the art world, the major players in the market are understood to provide buyers with a certain level of trust.

At Hephaestus, we believe that as artworks become guaranteed with authenticity insurance  that liquidity will be enhanced in the market and that authenticity will become foregrounded in the cultural discourse, incentivising the elimination of forgeries from the market.

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