Guaranteed

The New York Times reported this week that Christie's and Sotheby's are "back in the business of guaranteeing prices on works that they sell."  The Art Market Monitor says its a "thoroughly self-evident story."  I agree; I'm not sure why the press is so obsessed with this issue.  Carol Vogel had a similar story in the Times less than a year ago, focusing that time on the increase in third party guarantees (as opposed to in-house guarantees). Guarantees reduce the risk to the seller, and therefore attract more business to the auction houses.  What's the big deal?  For an interesting recent paper on the economics of auction house guarantees, see here.