I feel sorry for Dana Vachon.

Vachon is the 26-year-old investment banker-blogger-post-millennial-boulevardier who writes a Web column called d-nasty and who recently published a story in the New York Times about businessmen who skinny-dip together at their exclusive clubs. He's also the author who just got a more than half-million-dollar deal from Riverhead for two novels (see Deals).

Which is why I feel sorry for him.

I'm generally not in the business of pitying people a couple of decades younger and a few zeros richer than I am, and I'm pretty sure this feeling is not envy masquerading as compassion. Let me say that I have nothing but respect for Cindy Spiegel of Riverhead, who bought the book. She's a savvy, discerning editor who buys what she believes in and knows what she's doing—she paid half a million dollars for The Kite Runner, which once looked like a so-so idea until.... But I worry for Vachon because most of the time these big advances to first-time authors don't come close to earning out—and that's never a good thing for the publisher, the reader or the author. That is to say, for every Jonathan Safran Foer or Nathan Englander, there are probably half a dozen John Murrays. Who? He's the young man who wrote a wonderful collection of stories (A Few Short Notes on Tropical Butterflies) for which HarperCollins paid several hundred thousand dollars—and the 2003 book fell way short, saleswise.

And never mind what these big prices do to all the other authors out there, 90ish percent of whom receive advances that, to paraphrase Calvin Trillin, only slightly exceed the cost of the lunch at which the deal is celebrated. And besides, the more the big-ticket books tank, the fewer dollars the publishers have to spread around to the poor, struggling hoi polloi.

It seems to me that writers (and their agents) really take a risk when they shoot for and accept six-figure advances for work nobody's sure they can sell. It must be mighty tempting, of course, partly because everybody likes money and partly because authors often assume, logically, that a book for which a publisher has paid a high advance is a book that a publisher will later pay to promote. Sadly, of course, it often doesn't work that way.

So what's the answer? I'm tempted to suggest "advance caps," but I value my life and my family and the many good relationships I have with agents too highly to do that. So I'll just say that if publishing's a game you want to play for life, it's probably better not to get too sucked into the chugging contest that a frenzied auction can become. And there is precedent for holding back: a short story writer, Kelly Link, whose Stranger Things Happen was a cult hit a few years ago, reportedly turned down major house money to stay with Small Beer Press, which she co-runs with her husband, Gavin Grant. Writers might consider this rule of thumb: unless the money they're offering is so much that you'll never need to work (or publish) again—and that usually is not a few hundred thousand dollars, minus an agent's fee, paid out over two to three years at the least—you may end up never working (or publishing) again. And if you're a publisher, think back to that hallowed bygone, pre-BookScan era when editors were actually allowed to nurture careers and weren't constantly buying themselves into a corner.

And if you're an agent, well, take heart. Baseball players have managed to avoid the salary cap all these years, and payrolls have ballooned nicely. Since publishing is further back on the entertainment business evolutionary scale, I'd say you're still pretty safe.