Abstract: Winner’s Curse refers to the situation where the auction winner curses after winning the auction through overestimating values of the auction items for ownership acquirement because of the inconformity does exist between their previous expectation and the actual value. It is common that winner’s curse happens in the auction business assets, mergers and acquisitions, gaming, investment decision-making and other fields. Winner’s curse can be explained by the loss aversion, overconfidence theory and meanwhile affected by the uncertainty of the auction goods’ value, the number of bidders, information and lessons learned, etc. Effective strategies for responding to the winner’s curse contain the joint bidding strategy, information sharing and learning more cautious. Future research on the winner’s curse needs to explore the psychological mechanism, research paradigm and localization issues.

Key words: winner’s curse, loss aversion, information asymmetry, joint bidding