Rethinking Human Behavior in Economics: Insights from Thaler and Imas

The Winner's Curse occurs when the winners of auctions or bidding wars tend to overpay and end up paying more than the item's worth, a phenomenon observed across various markets and domains. Richard Thaler, a pioneer in behavioral economics, highlights how irrational bidding behavior leads to this curse and offers advice to avoid it, emphasizing cautious bidding especially in competitive environments with many bidders.