Price setting in art

The pricing of an object of art is a very common question. Every artist struggles with it and it wraps around to underlying questions:
1 Do I calculate a price and if yes, how?
2 Would this price be realistic for the market?

So you think you go about and create a very realistic price for your artwork on which you spend a numerous hours on and think you will definitely will be able to sell it. You start with question number 1:
There are many ways to calculate a the price of a work of art. You grab your costs and add an hourly rate to it. The costs can just be your materials, but some may include everything in it like your costs for having a website. Hourly rates can vary a lot as well and when picking an hourly rate you soon start to wonder what is a fair rate and that is just before you drop into the second question:

The second question is when you start to research what other similar artworks go for, or more accurately; what other artists ask for their work. So you check artworks of similar size, quality and type.  Then you realise that the prices vary a lot, but that their is a rough baseline. But within that base line an artist can still ask 3 times as much as a different artist with very comparable work. The clue partly lies in the word 'ask'. Everybody can ask something, whether they get it is something very different, but that is only part of the explanation.
The other part is a lot more important an completely ruins both questions you have just been researching, because when you were doing that research you did discover artworks actually being sold for 20 times more than the baseline of prices for a similar work of art; quality, size and type. Off course you realise that you might have gone wrong somewhere because it is difficult to asses the quality side of it. But that said, if you make landscape paintings you probably know a bit how to pull of a landscape painting and you wouldn't be judging the creation of a bronze sculpture or an installation.
I think it is safe to assume that there are a lot of artworks sold for a lot more money from one artist where similar quality artwork from another artist could have been bought by spending 10 times less.
How is that possible? Well, I think because the product, art, is very hard to judge by the average buyer. There are only a few people that can assess the quality of various different type of artworks in a good way, for the rest there are loads of people that pretend they do. So a lot of the judgements are more based on opinion, so you as a buyer might as well use your opinion when buying art, but that is where it goes wrong and where you get these freak prices. The prices go wrong in two ways: People often not just buy an artwork because they like it, but also whether their friends, perhaps more art minded friends, will like it as well. So they will follow other peoples opinions, presented as quality assessments, and buy accordingly. The second reason the prices go wrong is that a lot of people will also buy art as an investment, so they will follow where ever the market takes them. Weirdly, with all the difficulty of judging art on quality, for an art investment it isn't important to buy quality as much as you would expect, but whatever grows in price, so more the perceived quality.

You might have read this and think; what is 'wrong' about those prices, it is just how the market works. Yes, it is, but I have always had difficulty to except people behaving in a certain way not because it is better, but because everybody does that. Same with this. If one celebrity buys an artwork from artist x, then suddenly that artist can slowly push the prices up 10 fold. His quality hasn't gone up 10 fold and there are loads of other artists that would make the same art but didn't come across that celebrity to sell to.

I often get comments that I should ask more money for my sculptures, because x and y will ask the same price. But the question is always for me; do I sell it at that price? You can also wonder whether a lot higher price would create a better perceived quality, but to pull that off you need to be showing your work at the right places and does are hard to get into without someone influential.

I just hope one day that I do become a bigger name and that the works I have sold to people that appreciate my work, simply because they like it, will see their sculptures rise in price, but that they will still keep it!