“Errors of human judgment can infect even the smartest people, thanks to overconfidence, lack of attention to details, and excessive trust in the judgments of others, stemming from a failure to understand that others are not making independent judgments but are themselves following still others—the blind leading the blind.” – Robert J. Shiller
Research has shown that trying to win an
auction often causes us to act irrationally. This leads to what’s called the winner’s curse, a phenomenon
where the winning bid in an auction exceeds the true worth of an item. Often,
the bidder who overestimates an item’s value most ends up winning the
auction.
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