Picasso's Nude, Green Leaves and Bust became the world's most expensive painting last year when it sold for £65 million. A stupendous price, but one that reflects Picasso's status as one of the giants – if not the overriding genius – of 20th-century art. But do the high prices fetched at auction always indicate artistic merit? Aren't they often the result of a fraught bidding war between two super-rich collectors? Doesn't the $25 million stumped up for Jeff Koons' giant balloon model say more about the power of hype than the merit of the work itself? What's more, the market itself can easily be rigged. When Damien Hirst's diamond encrusted skull was purportedly sold for £50 million in 2007, rumour had it that Hirst himself was part of the consortium that bought it in order to drum up publicity and raise the market value of his other work.
So does the art market tell us only about fads and fashion and the egos of multimillionaires? Or should we overlook the hype and remember that in the long run the market rights itself and reflects the consensus on what great art really is?