Suppose a fashion designer wins a bid to design clothes for the characters of a movie.During his work he finds out that the payment he receives would not only cover his production costs but also earn him profits.The producer of the movie can be said to be facing a winner's curse.

Question

Quizplus · Accepted Answer

The scenario described does not fit the definition of the winner's curse, which is a phenomenon in which the winning bidder in an auction overpays for an item or asset due to a lack of accurate information about the true value of the item. In this scenario, the fashion designer has accurately assessed the value of his work and is not overpaid.

Suppose a Fashion Designer Wins a Bid to Design Clothes