The article explains why people tend to bid more than they should in auctions. The researchers suggest that our bidding behavior is influenced by how we compare the auction price to what we think the item is worth. They found that when we feel like we might lose out on a good deal, we tend to bid higher than we should. This tendency was seen in both private and common value auctions. The study shows that this reference-dependent model fits the data better than other models, indicating that our tendency to overbid might be due to how we perceive potential losses and gains in auctions.