Winning a competitive auction is itself evidence you overpaid

When many bidders independently guess the value of something uncertain, like an oil field's reserves, their estimates scatter around the true value. The winning bid is, almost by definition, the most optimistic guess in the room, meaning the winner systematically tends to overpay. Oil companies documented this in their own auction results decades before economists named it, and now deliberately discount their own bids to compensate.

— E. C. Capen, R. V. Clapp and W. M. Campbell, Competitive Bidding in High-Risk Situations — Journal of Petroleum Technology, 1971

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