Dealer appears to function as market maker

• Dealer appears to function as market maker

• Dealer can pay more because of his inventory

• Sellers are liquidity traders

• Evidence of efficiency

• Cannot buy and sell profitably in the auction market
• Art work bought-in sells for less than the buy-in price
• Highest buy-in rate is for dealers as sellers
• Prices rise after death

• Evidence of inefficiency: strong autocorrelation