On the Robustness of the Winner's Curse Phenomenon

39 Pages Posted: 16 Feb 2005

See all articles by Brit Grosskopf

Brit Grosskopf

University of Exeter Business School - Department of Economics

Yoella Bereby-Meyer

Ben-Gurion University of the Negev - Department of Education

Max H. Bazerman

Harvard Business School - Negotiations, Organizations and Markets Unit

Date Written: April 24, 2003

Abstract

We set out to find ways to help decision makers overcome the "winner's curse," a phenomenon commonly observed in asymmetric information bargaining situations, and instead found strong support for its robustness. In a series of manipulations of the "Acquiring a Company Task," we tried to enhance decision makers' cognitive understanding of the task. We did so by presenting them with different parameters of the task, having them compare and contrast these different parameters, giving them full feedback on their history of choices and resulting outcomes, and allowing them to interact with a human opponent instead of a computer program. Much to our surprise, none of these manipulations led to a better understanding of the task. Our results demonstrate and emphasize the robustness of the winner's curse phenomenon.

Keywords: Winner's Curse, Asymmetric Information, Cognitive Learning

Suggested Citation

Grosskopf, Brit and Bereby-Meyer, Yoella and Bazerman, Max H., On the Robustness of the Winner's Curse Phenomenon (April 24, 2003). Available at SSRN: https://ssrn.com/abstract=667369 or http://dx.doi.org/10.2139/ssrn.667369

Brit Grosskopf (Contact Author)

University of Exeter Business School - Department of Economics ( email )

Streatham Court
Exeter, EX4 4RJ
United Kingdom

Yoella Bereby-Meyer

Ben-Gurion University of the Negev - Department of Education ( email )

1 Ben-Gurion Blvd
Beer-Sheva 84105, 84105
Israel

Max H. Bazerman

Harvard Business School - Negotiations, Organizations and Markets Unit ( email )

Soldiers Field
Boston, MA 02163
United States
617-495-6429 (Phone)
617-496-4191 (Fax)

HOME PAGE: http://www.people.hbs.edu/mbazerman

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
332
Abstract Views
3,923
Rank
176,705
PlumX Metrics