The winner’s curse can lead us to overpay in auctions—and fear of the winner’s curse can lead to other problems. Here’s advice on addressing this common risk in auctions and other competitions.
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winner’s curse
The tendency to overbid in competitive auctions and thus overpay for an item because of competition for it. Because the winner has overbid, she is said to suffer the winner’s curse because she has what she desired, but at a much greater cost than it is worth. See Also: Dealmaking: Why It’s Tempting to Trust Your Gut, The Winner’s Curse, Beware Your Counterpart’s Biases.
The following items are tagged winner’s curse:
Definition of the Winner’s Curse in Negotiations
The winner’s curse negotiations, when a negotiator overbids for an item due to competitive pressure or other non-value related factors, is a major pitfall that integrative bargainers should seek to avoid.
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