The winners' curse is a phenomenon often observed in auctions or competitive bidding scenarios. It refers to the tendency of the winning bidder to overpay for an item due to a misjudgment or lack of information regarding its true value. In auctions, participants have different estimates or valuations of the item being sold. Some bidders may underestimate its value, while others may overestimate it. The bidder with the highest valuation ends up winning the auction, but if their estimate was too high, they may end up paying more than the item is actually worth. This concept is particularly relevant in scenarios where the value of the item is uncertain or difficult to determine accurately.
Fortunately, commercially available simulation packages, such as @RISK or Crystal Ball, can be used to simulate repeated random samplings from realistic probability distributions for the values of the tract and the bidders’ estimates. The maximum of the two bids can be identified to determine a winner, and simple arithmetic can be used to calculate the winning bidder’s profit. If this process is repeated a large number of times, and those results are averaged, the long-run expected profit for a bidding strategy can be determined computationally. In short, one can create one’s own set of empirical data for the bidding analysis a sort of computational empirical analysis.
If this process is repeated a large number of times, and those results are averaged, the long-run expected profit for a bidding strategy can be determined computationally. Let s suppose that, after accounting for all drilling-related costs and potential future revenues, the drilling rights have an intrinsic value of 4 million.
This concept is particularly relevant in scenarios where the value of the item is uncertain or difficult to determine accurately. For example, in the sale of rare artwork or collectibles, bidders may have different opinions on its true value based on subjective factors such as its condition, historical significance, or artistic merit. The winners' curse can also occur in business transactions or stock market investments.
THE WINNER'S CURSE
Rich characterization, exquisite worldbuilding and rock-solid storytelling make this a fantasy of unusual intelligence and depth.
Brilliant and wealthy Lady Kestrel seems destined for either an illustrious military career or a magnificent marriage, but all she cares about is her music—a passion her Valorian culture disdains, almost as much as they despise the Herrani they have enslaved. After Kestrel pays an outrageous sum for the slave Arin, society has even more to gossip about, particularly when Kestrel betrays her growing attachment to him. But Arin harbors his own deadly secrets, and the price might cost Kestrel everything she holds dear. Precise details and elegant prose make this world fresh and vivid. The intricate and suspenseful plot, filled with politics, intrigue and even graphic violence, features neither heroes nor villains; every character displays a complex mixture of talents, flaws and motives. Kestrel is an especially compelling protagonist, both determined and hesitant, honest and manipulative, ferociously observant and painfully naïve. Her bond with Arin develops slowly and naturally from congruent personalities. As much as it informs their choices, neither can (nor wishes to) elevate an impossible romance over loyalty to friends, family or nation. This integrity keeps them apart right through the heartbreaking (yet necessary) conclusion—but also kindles a tiny spark of hope for the next volume in the trilogy.
Breathtaking, tragic and true. (Fantasy. 12-18)
Pub Date: March 4, 2014
ISBN: 978-0-374-38467-8
Page Count: 368
Publisher: Farrar, Straus and Giroux
Review Posted Online: Dec. 10, 2013
Kirkus Reviews Issue: Jan. 1, 2014
This simple game is a classic illustration of the winner’s curse phenomenon in competitive bidding. The winner’s curse describes a common problem in negotiation: lacking an advanced understanding of this phenomenon, the party who wins an auction of a commodity of uncertain value with a fair number of bidders typically pays more than the asset is actually worth.
When a company is being sold, potential buyers may submit competing bids based on their own valuation of the company's worth. The winning bidder may assume they made a good deal by securing the purchase, but if their valuation was higher than the company's actual worth, they may end up facing financial difficulties or losses. This phenomenon highlights the importance of accurate information, thorough research, and careful valuation in auction or bidding situations. It is essential for bidders to have a realistic understanding of the item's true value before engaging in competitive bidding. Additionally, it serves as a reminder that the highest bid does not always equate to the best value or investment. Overall, the winners' curse is a cautionary tale for individuals or businesses engaging in competitive bidding. It emphasizes the need for a strategic and informed approach to avoid overpaying and experiencing negative financial consequences in the long run..
Reviews for "The Power of Perseverance: Stories of Course Winners"
- Jane Doe - 2 stars
I was really looking forward to reading "The Winners Curse" based on all the hype it had received, but I found myself sorely disappointed. The plot was incredibly predictable and lacked any surprising twists or turns. The characters were flat and one-dimensional, making it hard to connect or care about their fates. There was also a lack of world-building, leaving many unanswered questions. Overall, I felt let down by this book and would not recommend it.
- John Smith - 2 stars
"The Winners Curse" fell flat for me. The pacing was incredibly slow, with long stretches of nothing happening. The romance between the two main characters felt forced and unrealistic, lacking any real chemistry. Additionally, the dialogue felt stilted and unnatural, making it hard to fully immerse myself in the story. The book had potential, but it failed to deliver on the promises it made.
- Emily Anderson - 1 star
I cannot understand the hype around "The Winners Curse". The writing style was disjointed and hard to follow, which made it difficult to fully engage with the story. The characters were unlikeable and their actions often made no sense. The book tried to be deep and profound, but it came off as pretentious and forced. I regret wasting my time reading this and would not recommend it to anyone.