Big Roads Construction is participating in an auction for a government contract to build a large highway. If Big Roads wins the auction, they will build the highway for the bid they submitted. Big Roads will face the winner's curse if their winning bid is too_______, making Big Roads earn _______economic profit.

Question

Quizplus · Accepted Answer

The winner's curse occurs when the winning bid in an auction is lower than the true value or cost, leading to less economic profit or even a loss.

Big Roads Construction Is Participating in an Auction for a Government