Information Asymmetries in the Pricing of Fine Wines

A dynamic econometric model of wine auctions is estimated to measure the informational signalling impact of a wine critic on the return to the investment in fine wines. United States data suggests that critic Robert Parker is an influencer on the auction price of Bordeaux wines. Furthermore it appears that American buyers look toward the much larger European market in order to establish values. In doing so they may be able to mitigate the effects of asymmetric information.