Johann Wolfgang von Goethe, Amateur Auction Theorist
June 13, 2016 6:46 PM   Subscribe

I am inclined to offer Mr. Vieweg from Berlin an epic poem, Hermann and Dorothea, which will have approximately 2000 hexameters. …Concerning the royalty we will proceed as follows: I will hand over to Mr. Counsel Böttiger a sealed note which contains my demand, and I wait for what Mr. Vieweg will suggest to offer for my work. If his offer is lower than my demand, then I take my note back, unopened, and the negotiation is broken. If, however, his offer is higher, then I will not ask for more than what is written in the note to be opened by Mr. Böttiger.
posted by Chrysostom (7 comments total) 11 users marked this as a favorite
 
I'm curious how the agent knew the sealed bid, and how Goethe failed to detect it's opening. Anyways, this brief ends on a down note, but the actual paper it's based on mentions that Goethe learned some lessons from the event:
In 1828, Goethe indeed used the strategy of attracting many bidders for the publication of his collected works (which was considered a seminal event): after Goethe's intention to publish such a collection appeared in the press, no fewer than 36 publishers made bids. Not all bidding publishers were considered serious enough to be entrusted with such an important task (around 40 volumes were needed). Goethe accepted an offer of 60,000 talers from the wellknown publisher Cotta. Having in mind Goethe's profit from the sale of Hermann and Dorothea (which was only 25 percent of the total profit from the first edition), note that the auction with many bidders enabled Goethe to obtain a much higher share of the cake. Whereas Goethe quickly cashed 60,000 talers, Cotta earned a profit of around 70,000 talers,'' but stretched over 12 years.
His rate went from 1k to 60k talers!
posted by pwnguin at 7:49 PM on June 13, 2016 [1 favorite]


Goethe was an amateur X for pretty much all X. The exceptions are those things he was a professional at.
posted by kenko at 8:11 PM on June 13, 2016 [3 favorites]


I'm curious how the agent knew the sealed bid, and how Goethe failed to detect it's opening.

That's not how I read the article. My understanding was that Böttiger suggested to Vieweg what he thought Vieweg would need to bid, based on what Goethe had received for other recent works. That the figure was right on the nose was probably a combination of luck and it being a nice round number.

However, it's not clear to me why Böttiger, ostensibly Goethe's lawyer, would tip his hand to Vieweg that way.
posted by DevilsAdvocate at 8:55 PM on June 13, 2016


In the absence of other bids, doesn't Goethe's sealed-note proposal mean to the publisher, say yes and pay Goethe's rate or say no and don't? An arbitrarily large bid is agreeing to pay the mystery price, A zero bid is a flat no, and a low bid makes a counter-offer.
posted by Pickman's Next Top Model at 9:40 PM on June 13, 2016


It's kind of like when I go to Wegmans (a local supermarket chain in the NE U.S.) and I look at a porterhouse and I think to myself, "I'd pay $14.00 for that." Then I pick up the wrapped steak and if it says more than $14.00, I put it back. If it's at or below $14.00, I buy it. I'm the Vieweg in this transaction. I wish I was the Goethe.
posted by Michael Tellurian at 10:16 PM on June 13, 2016 [3 favorites]


However, it's not clear to me why Böttiger, ostensibly Goethe's lawyer, would tip his hand to Vieweg that way.

Maybe he was on commission, and was afraid a lowball offer would break the deal.
posted by Dr Dracator at 3:39 AM on June 14, 2016 [2 favorites]


It's kind of like when I go to Wegmans (a local supermarket chain in the NE U.S.) and I look at a porterhouse and I think to myself, "I'd pay $14.00 for that." Then I pick up the wrapped steak and if it says more than $14.00, I put it back. If it's at or below $14.00, I buy it. I'm the Vieweg in this transaction. I wish I was the Goethe.

Not quite — in fact it's even worse for Vieweg than it is in your example.

This is a kind of tortured analogy, but instead of a price tag, imagine there's a small electronic display and numeric keypad attached to the steak. You type in "14.00." If the price is equal to or less than 14.00, the actual price is displayed (say, "12.75") and you buy it at 12.75 — in fact, you're now obligated to buy it at that price. But if the price is more than $14.00, the display just says "NO," it doesn't tell you the price. And you don't get a second chance to bid — once the display has said "NO" you can't put in a higher bid to try to buy the porterhouse. (The fact that you are obligated to buy the porterhouse if your bid is equal to or larger than the price prevents you from typing in a very large number just to learn the price and then deciding not to buy it.)

If the transaction does not go through, Goethe still learns Vieweg's price, but Vieweg does not learn Goethe's. This can be advantageous to Goethe if he wants to sell other works to Vieweg in the future.
posted by DevilsAdvocate at 4:01 AM on June 14, 2016 [2 favorites]


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