This factor contributes to the winner's curse
A)your estimate of the value of the object was not the most optimistic
B)your bid was not the highest
C)there were many other bidders that you beat out
D)you shaded your bid too much

Question

​This factor contributes to the winner's curse
A)​your estimate of the value of the object was not the most optimistic
B)your bid was not the highest
C)there were many other bidders that  you beat out
D)​you shaded your bid too much

Quizplus · Accepted Answer

The winner's curse refers to the phenomenon where the winner of an auction tends to overpay due to the nature of competitive bidding, especially in common value auctions where the item's value is the same for all but unknown at the time of bidding. Winning often means having the highest estimate of the value, which can lead to paying more than the item's actual worth. This is particularly likely when there are many other bidders, as beating out a large number of competitors increases the chance that your bid was based on an overly optimistic valuation.

​This Factor Contributes to the Winner's Curse

This Factor Contributes to the Winner's Curse