The overheated market has raised the stakes for all players. In October, the shuttering of the once well-respected Salander-O’Reilly Galleries amid a hail of lawsuits left many people clucking their tongues about irresponsible dealers, but auction houses are equally vulnerable. Yes, the big houses have deeper pockets than any one dealer, but they also have higher overhead and take greater risks. As elsewhere in the art world, a growing percentage of the auction houses’ profits derive from an increasingly small number of high-end sales. The bulk of their marketing efforts go into promoting multimillion-dollar consignments, which often leaves sellers of lower-priced works underserved and disgruntled.

In almost every segment of the art world, the middle market is languishing. The dynamic of the salesroom requires multiple bidders, and collectors, often encouraged by auction house personnel, tend to cluster around the flashiest lots in a sale. Consequently, minute differences in quality can have an inordinate influence on pricing. In some cases, due to arbitrary marketing decisions, ignorance and luck, inferior works win out over better ones, the latter commanding far less than they should or failing to sell altogether.

With more than ever riding on the top end of the market, auction houses compete vigorously for those choice consignments. They drop the seller’s commission altogether, kick back a portion of the buyer’s premium to the consignor and, most notoriously, offer guarantees. (In exchange for a higher commission, the auction house guarantees to buy the work for an agreed-upon price if it does not sell, or to make up the difference if it sells below the guaranteed amount.) The art world momentarily held its breath after the Impressionist and Modern auctions in New York this past November, when five guaranteed lots (including two bearing estimates in the eight figures) failed to find buyers at Sotheby’s evening sale. In the days after the auction, Sotheby’s stock plunged 28 percent, and some thought the art-market bubble had finally burst. Optimists, on the other hand, cited the strong results at Christie’s just two days earlier, and they were, at least for the time being, proven right when the contemporary auctions the following week pulled in over half a billion dollars.