Which statement is correct about the "winner's curse"?
A)Misstatements from the winner's curse are unintentional under-estimates or over-estimates.
B)Misstatements from the winner's curse result from the unavailability of correct information.
C)The winner's curse means a contract is usually awarded to the highest bidder.
D)The winner's curse means that a contract will tend to be awarded to the contractor who underestimates costs the most.

Question

Quizplus · Accepted Answer

The winner's curse refers to the tendency for the winning bid in an auction or competitive bidding situation to be overly optimistic, often resulting in the winner underestimating costs or overestimating value, leading to potential losses.

Which Statement Is Correct About the "Winner's Curse