When an art buyer cannot establish with certainty the origin of the work, namely when there is a risk that the purchase transaction concerns a forgery

The Economic Consequences of Generative AI on the Art Market

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2024-10-06 19:30:03

When an art buyer cannot establish with certainty the origin of the work, namely when there is a risk that the purchase transaction concerns a forgery and not a genuine artwork, the buyer adjusts her willingness-to-pay based on the average probability that the artwork is authentic. Given that the artistic outputs of generative artificial intelligence system are indistinguishable from human-made ones, this blogpost argues there is a risk that the latter will be devalued. This would be especially true given that the market value of machine-enabled artwork is expected to be lower than the human-made one. Art authentication could solve the problem, but law- and policymakers should be aware that such rule of origin cannot be dyadic given that some machine-enabled artworks owe their existence more to the human user of GenAI than others.

With the advent of generative artificial intelligence (GenAI) come tremendous economic consequences. This blogpost does not discuss whether and how GenAI will disrupt the working world. Rather, it focuses on the market for artworks and argues that GenAI leads to George Akerlof’s lemons problem (1)—albeit slightly modified to encompass the idiosyncrasies of the art market (2)—because human-made and machine-enabled artworks are indistinguishable (3). The blogpost ends by recommending bottom-up and top-down rules of authentication (4).