S2 Ep1740: PASSION STRUCK John R. Miles: Alex Imas, The Winner’s Curse: How Behavioral Economics Explains Why We Make Bad Decisions

The Winner’s Curse: How Behavioral Economics Explains Why We Make Bad Decisions

The winner’s curse describes a paradox that shows up everywhere in modern life. The moment we win an auction, land the deal, or beat the competition is often the moment we unknowingly overpaid, overcommitted, or misunderstood the true value of what we gained. 👉In this episode of Passion Struck, Alex Imas joins John R. Miles to unpack why winning so often leads to regret, how behavioral economics explains this pattern, and what it reveals about the way humans make decisions under uncertainty. Drawing on decades of research and real-world examples, this conversation explores how our mental shortcuts, overconfidence, and distorted perceptions quietly shape outcomes in markets, careers, and everyday choices.
👉The Curse Explained This phenomenon occurs when the person who “wins” is actually the one who made the most optimistic error. Because everyone is working with imperfect information, the highest bid or strongest conviction often reflects the biggest overestimation rather than superior insight. Originally observed in competitive auctions and natural resource markets, the winner’s curse now appears across investing, hiring, negotiations, and even personal life decisions. Winning feels good in the moment, but it can signal that we misunderstood the situation more than anyone else. This episode explains why success itself can be a warning sign.

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