The Winner's Curse

The Winner's Curse refers to a common scenario in competitive bidding situations where the winning bidder overestimates the value of the item or project and ends up paying too much. This often happens in auctions or negotiations, where bidders may become overly enthusiastic and bid higher than the item's actual worth. As a result, the winner may experience regret and financial loss because they have paid a premium without realizing the true value. This concept highlights the importance of careful valuation and rational decision-making in competitive environments.