In this article from the New York Times, the sudden boom of Indonesian art, its causes and effects, are described.

Basically - Chinese art was the former fad, but the lower prices of Indonesian art has made it the next big thing. This was seen after what the article referred to as the “May 2007 incidents” (even though the first of which happened in April). In these ‘incidents,’ the winning bid for an Indonesian art piece was higher than expected (in the first of these, the price was at least 10x higher than the estimated bid). After this, prices for pieces be contemporary Indonesian artists rose higher and higher (though still orders of magnitudes less than the prices of Chinese art). The thing that strikes me the most odd is that some paintings have a price and want to be bought before they are even started, let alone finished.

Unfortunately, this may affect the artistic world in a negative manner - lowering creativity for the sake of painting what will sell. Another negative impact they listed is that the boom may cause its own demise - “The faster prices rise and the more crowded the market becomes, the more quickly the fire may burn out, experts said. “Those who live and die by the art market,” wrote Mr. Soetriyono in his magazine, “are certain that it will not last.”“

This is very easily described in as a cascade like we described in class: people have a binary decision - to buy, or not not buy. When people began looking at others’ decisions to buy Indonesian art at such a high price, they begin ignoring their own signals (which you could consider the art itself) and just following the trend of buying. As my experience has led me to see - the more people like one type of thing, the more everything starts to resemble eachother and the less unique it gets - as such, if artists indeed do start trying to paint solely what sells, then the quality of art will likely drop which may cause someone to realize that the art might not be all that great - causing a break in the cascade (a result of better information).

Additionally - as more artists try and profit off of this sudden boom, there will be more sellers than buyers and, thus, prices will either level off or drop. If we consider the trading model with Auction Houses as the traders, Artists as Sellers, and Collectors as Buyers, then there are certain scenarios we can consider:

If one Auction Houses monopolizes several Artists - Auction Houses will profit and receive high prices, but Artists would likely be getting lower pay for each painting and would likely attempt to find another means of getting their paintings sold: another Auction House. In otherwords, it’s not likely an Auction house would be ABLE to monopolize many artists and exploit their monopolization to get high prices out of the buyers and low prices out of the artists.
Then we’d see Auction Houses compete for different Artists - once prices reach a point, as the number of artists grow, the more likely a Collector will be able to get a lower price at a different auction house - especially if painters begin conforming to the style which sells.
Even upon just thinking about the general, “supply > demand –> low prices” concept will lead one to realize that the faster this trend grows, the faster it will fall. As prices rise, it would make sense that there would be less people who can afford such high prices, and as such, the number of buyers would decrease as the number of artists who want to take advantage of the high prices increases.