Matt Levine’s Money Stuff: Don’t Take the Auditor to the Club

Cabaret

A few months ago, I wrote that “one of the main problems in finance is the principal-agent problem, and one of the main forms that it takes is steak dinners.” You know the deal. You want something from a company or government agency, but you negotiate with that company or agency in the form of a person, some particular executive or official who decides whether to give you the thing. The company or agency has purposes of its own, but the person is a person, and he enjoys a steak dinner. If you discuss your issue with him over ...