Abstract
AbstractThe story in which Goethe sold a manuscript through a secret reserve price is revisited. Goethe's choice of secrecy can be explained as an attempt to mitigate the lemons problem through concealing his private information about the manuscript. The standard mechanisms that make the price public are unsafe for the seller as the buyer may adopt non‐trusting posterior beliefs. A safe inscrutable mechanism is constructed here that generates more expected profits for some seller types than any such standard mechanism. A contrast between this mechanism and the one devised by Goethe explains why his mechanism was corrupted during its execution.
Full Text 
Sign-in/Register to access full text options
Sign-in/Register to access full text options 
Published version (
Free)
Free) 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a call
