Bidders Beware: Non-Aggressive Strategy Unveils Hidden 'Winner's Curse' in Auctions
In certain auction situations, it can be better to bid less aggressively when facing competition. The conditions for choosing a non-aggressive bidding strategy are closely related to the "winner's curse" phenomenon. The "winner's curse" refers to how winning an auction can sometimes lead to negative outcomes for the bidder. This study defines the "winner's curse" more precisely and shows how it influences a company's competitive behavior.