On the robustness of the winner's curse phenomenon

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.