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So Böttiger ratted Goethe out. It's unfortunate that Goethe figured out the Vickrey auction, but not the principal-agent problem.
by tpeo 10y ago
So Böttiger ratted Goethe out. It's unfortunate that Goethe figured out the Vickrey auction, but not the principal-agent problem.
- jontas 10y agoI see how his agent sharing the contents of the envelope hurt Goethe's attempt to gather intel for future auctions, but the outcome of the sealed envelope auction was unchanged, or am I misunderstanding? Goethe had 1000 talers as his minimum price so no matter what Vieweg offered, so long as it was above 1000 Goethe was never going to make more than that. For this reason I find the last paragraph of the article confusing: > Hermann and Dorothea went on to be a bestseller, earning tens of thousands of talers for Vieweg and nary a penny more for poor Goethe.
- kencausey 10y agoThe article clearly states that the purpose (in theory at least) was not merely to get 1000 talers but to also get a better estimate of the publisher's perceived valuation of Goethe's work.
- erikb 10y agoA pity that you propose the problem but not a solution. What would you propose to overcome the principal-agent problem in that regard? A tournament between different lawyers (proposed solution by wikipedia for prinipal-agent problem) doesn't really seem to work since it would only make sense after comparing the results of many transactions and of many lawyers.