Bidding Strategy: Avoiding the Winner’s Curse


It’s June, and the world’s attention is on Brazil!  The World Cup has introduced us to a spectrum of footballers.  With all their virtues and faults, they have become the would-be heroes of hopeful nations.  Closer to home, the flat screen TV at the office has has been locked on only one channel.  Collegues have been gathering to catch glimpses of the action or the highlights of great matches like Spain’s crushing loss to Chile.  It’s been an exciting month so far!

The sense of accomplishment can be awesome.  The triumph can be even sweeter if an underdog prevails.  Overcoming struggle to come out on top is often rewarded with glory, perks, and even more opportunity.  This can be powerful stuff when dreaming up strategies and competing.  However, it can be devastating when a “winner’s curse” is experienced, especially in the marketplace.

How do you avoid a winner’s curse?

As a mechanical estimator, I have seen many great construction projects come out for bid. As the bid date approaches, contractors fine tune plans to land the project.  The proverbial grapevine can be source of insight or a channel to seed competitors with misinformation.  Regardless of your strategy, keeping your focus on one basic rule will always prove to be advantageous:

Always bid as if you’ve won.

Always prepare your bid under the assumption that all competing bids are lower. While preparing your best bid, you must remain focused on your capabilities, not the perceived valuation of the project.  Otherwise, you run a high risk of being doomed with the winner’s curse.  Remember: your actions have consequences, so don’t make a move you will regret down the road.

Please drop a note in the comments section.  I’d love to hear your perspective.

It’s your move.  Make it a great one!



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